Scott A. Tozier
Executive Vice President & Chief Financial Officer at Albemarle
Thanks, Kent, and hello, everyone. Let's review our first quarter performance on slide five. Net sales for the first quarter were $2.6 billion, up 129% compared to last year. This is a $1.5 billion increase and was driven by Energy Storage, as a result of both higher market pricing flowing through our variable price contracts and higher volumes. Net income attributable to Albemarle was $1.2 billion, up almost 390% compared to the prior year. Diluted EPS was $10.51, also up almost 390%, which is another record quarter for Albemarle. Looking at slide six. First quarter adjusted EBITDA was almost $1.6 billion, an increase of approximately 270% year-over-year. This $1.1 billion increase was almost entirely driven by higher net sales in Energy Storage.
Our Specialties business unit was up due to increased pricing and some lower freight costs, which were partially offset by lower volumes. Ketjen declined slightly due to volumes associated with the winter freeze in Texas, earlier in the quarter. And importantly, we saw year-over-year price increases more than offsetting inflation in the quarter. On slide seven, we are adjusting our 2023 guidance to reflect current lithium market pricing. On average, lithium indices are down about 50% to 60%, since the start of the year. Based on our established guidance methodology, we are taking lithium market price indices as of mid-April and holding them flat for the balance of the year.
To be clear, we are not predicting lithium market pricing. We're simply taking the current price, holding it flat and running it through our contract structure. This is the same way we provided guidance last year. As a result, we now expect 2023 total company net sales to be in the range of $9.8 billion to $11.5 billion. This is up 45% over the prior year at the midpoint. We expect to see sales for the second quarter to be in line with Q1, and then see a sequential increase in sales in both the third and fourth quarters as ramping Energy Storage volumes more than offset sequential price declines.
Adjusted EBITDA is expected to be between $3.3 billion and $4 billion, reflecting a year-over-year growth of 5% at the midpoint. This reflects a full year EBITDA margin in the range of 34% to 35% for the total company. Our full year 2023 adjusted diluted EPS guidance is now in the range of $20.75 to $25.75, reflecting a year-over-year improvement of 8% at the midpoint. We expect our net cash from operations to be in the range of $1.7 billion to $2.3 billion, and our capex guidance remains at $1.7 billion to $1.9 billion. So, we still expect to maintain positive free cash flow for the year. Turning to the next slide for more detail on our outlook by segment.
The 2023 Energy Storage volume outlook remains unchanged, up 30% to 40% year-over-year. We now project average realized pricing to be up 20% to 30% for the full year. And note that our realized prices are expected to be up year-over-year in the first half, including in Q2 and then, down in the second half. We see volume growth in all quarters.
This leads potential upsides and downsides of the market price shifts during the year. Adjusted EBITDA for Energy Storage is expected to be between $2.7 billion and $3.4 billion, essentially flat compared to 2022. Beginning in the second quarter, we expect to see pressure on EBITDA margins, largely related to the timing of higher-priced spodumene inventories and the increasing impact of the MARBL joint venture. I'll cover that more -- I have more on that shortly. For Specialties, we are maintaining our guidance range for adjusted EBITDA to be up 5% to 10% compared to the previous year.
We expect to see pressure in the second quarter as customers work through their current inventories. However, we expect the second half of the year to be stronger with a recovery of end market demand, particularly consumer electronics. Ketjen's 2023 full year adjusted EBITDA is expected to be up 250% to 400%, over the prior year. This increase in outlook is due to higher volumes and better pricing. When we look at lithium market prices, we need to remember that most of our volumes are sold under long-term contracts with strategic customers.
We've updated our expected 2023 sales mix to reflect the recent market pricing, and there haven't been any changes to our contract structures in Q1. We expect our Energy Storage sales to be about 10% on spot, and 90% on index reference variable price contracts. These contracts are typically two to five years in duration, and are designed to ensure security of supply for our customers as well as to make our sales more predictable. These strategic customers include partnerships across the value chain, including major cathode, battery and automotive OEM customers.
We are more weighted towards the market than we have been in the past. However, we will still have less volatility than a true spot business because of the index reference structure of these contracts. They typically have a three-month lag and have -- some of them have caps and floors. As Kent said, our confidence in the long-term lithium market is reflected in our ongoing investments in resources and conversion capacity. As we look at slide 10, you can see we continue to expect year-over-year volume growth in the range of 30% to 40% in 2023.
As we bring on new conversion assets, specifically Kemerton and Qinzhou, plus some additional tolling volume. We still anticipate a 20% to 30% CAGR in Albemarle sales volumes between now and 2027, allowing us to maintain our leadership position and keep up with accelerated market demand. All told, we expect to nearly triple sales volumes to more than 300,000 tons by 2027. Long term, we continue to expect normalized Energy Storage margins in the mid- to high 40% range, in line with the outlook that we gave in January. We now expect Energy Storage margins to be about 40% in 2023, primarily based on revised lithium market pricing and the impact of spodumene inventory lags.
Most of the year-over-year decline in margins is related to that spodumene inventory lag. On average, it takes about six months for spodumene to go from our mines through conversion to our customers. Last year, we saw dramatic increases in pricing for lithium and spodumene. And due to that time lag on spodumene inventory, we realized higher lithium pricing faster than higher spodumene cost of goods sold. As a result, we had unusually strong margins in 2022. This year is the reverse as prices decline, we are realizing lower lithium pricing faster than lower spodumene costs. The next item affecting margins is the accounting treatment of the MARBL joint venture.
We expect to report 100% of net sales, but only our share of EBITDA, resulting in a lower reported margin rate on that portion of the business. And finally, our reported EBITDA margins are impacted by tax expense at our Talison joint venture. Talison net income is included in our EBITDA on an after-tax basis. If you had adjusted Talison results to exclude tax, margins would be about six points higher in 2023. Turning to slide 12. We will continue to invest with discipline, allocating our capital and free cash flows to support the highest return growth opportunities.
Our primary use of capital remains organic growth projects to leverage our low-cost resources in Australia and the Americas, and Kent will speak more about these projects in a moment. Beyond organic growth, we continue to evaluate a broad range of inorganic opportunities to expand capacity to meet our customers' future needs. Our primary targets are in three areas: lithium resources, extraction and processing technology, and battery recycling.
We intend to maintain our track record of a disciplined M&A approach that improves returns, preserves our financial flexibility with our investment-grade credit rating. In line with that strategy, and as previously disclosed, Albemarle submitted an indicative proposal to acquire Liontown Resources, a development-stage spodumene resource in Australia.
We believe this potential transaction would be consistent with our long-term growth strategy and disciplined approach to capital allocation. To date, the Liontown Board has not meaningfully engaged in progressing the transaction. We will provide updates if and when we have more information. Our balance sheet flexibility is a competitive advantage that allows us the opportunity to grow both organically and through acquisition, as well as support our dividend. And with that, I'll turn it back to Kent for a market update and closing remarks.
