Neal Sheorey
Executive Vice President, Chief Financial Officer at Albemarle
Thanks, Kent, and good morning, everyone. Beginning on Slide 5, I will summarize our third quarter performance. We recorded net sales of $1.4 billion compared to $2.3 billion in the prior year quarter, a decline of 41% driven principally by lower pricing, particularly for lithium. During the quarter, we recorded a loss attributable to Albemarle of $1.1 billion and a diluted loss per share of $9.45. Adjusted diluted loss per share was $1.55. Our GAAP result included a pre-tax charge of $861 million related to capital project asset write-offs at Kemerton 3 and putting Kemerton 2 into care and maintenance, of which about 10% is cash outflow in the second half of the year. This charge was below our initial estimate that we provided on the last earnings call of $900 million to $1.1 billion.
Turning to Slide 6. Our third quarter adjusted EBITDA of $211 million was lower than the prior year period, also primarily due to lower lithium pricing. This was partially offset by lower cost of goods sold, primarily related to reduced spodumene pricing. Other positives include higher volumes in energy storage related to delivery of our growth projects and in specialties related to stronger end market demand. Our cost and efficiency initiatives also provided productivity benefits, which more than offset inflation. Looking at adjusted EBITDA by operating segment, we saw improved year-over-year profitability in specialties due to productivity improvements and better end market demand. Ketjen EBITDA also improved year-over-year as we continued to execute our turnaround plan during the quarter.
Moving to Slide 7. As Kent mentioned, we are maintaining our full year 2024 outlook considerations, thanks to the execution of our cost and productivity improvements, continued strong volume growth, including higher sales volumes at our Talison JV and contract performance in energy storage. As a reminder, these scenarios are based on historically observed lithium market pricing and represent a blend of relevant market prices, including both China and ex China pricing for lithium carbonate and lithium hydroxide.
Turning to Slide 8 for additional commentary on outlook. We expect corporate full year 2024 net sales to be near the lower end of the $12 to $15 per kilogram scenario, primarily due to weaker second half pricing for lithium, offset by contract performance. Full year 2024 adjusted EBITDA is expected to be in the middle of that same scenario range, thanks to successful cost cutting and productivity improvements. In Energy Storage, we now expect full year volume growth to be more than 20% year-over-year as we have continued to benefit from solid demand, particularly in China and ongoing ramps of our new facilities.
Fourth quarter volumes are expected to be down sequentially, primarily due to timing of spodumene sales volumes, reduced tolling and planned outages. Margins are expected to be slightly higher sequentially as the benefit of lower priced spodumene in cost of goods sold offsets the impact of unabsorbed fixed costs as our new plants continue to ramp. At both Specialties and Ketjen, we continue to expect modest sequential improvements in the fourth quarter, thanks to better end market conditions and productivity benefits. Please refer to our appendix slides in the deck for additional modeling considerations across the enterprise.
Moving to our balance sheet and liquidity metrics on Slide 9. We ended the third quarter with available liquidity of $3.4 billion, including $1.7 billion of cash and cash equivalents and the full $1.5 billion available under our revolver. The actions we have taken to improve our cost structure and enhance operational efficiency have also provided enhanced financial flexibility. Thanks to our successful actions to reduce costs and optimize cash flow, we ended Q3 with net debt to adjusted EBITDA of 3.5 times or 2 turns below the covenant limit in the quarter. To navigate market conditions, we took proactive measures in the quarter around our covenant waiver.
The outcome of our action is shown on Slide 10. In October, we proactively extended our covenant waiver through the third quarter of 2026 and reshaped it to ensure we have the financial flexibility needed as we execute our new operating structure and cost reduction actions. Moving forward, our goal remains to stay well within these limits through solid financial and operational execution as we have shown throughout 2024.
Slide 11 highlights our execution focus, which is demonstrated by the continued improvement in our operating cash flow as a result of operational discipline and cash management actions. Our operating cash flow conversion defined as operating cash flow as a percent of adjusted EBITDA was greater than 100% in the third quarter, primarily due to timing and management of working capital. We continue to expect full year operating cash conversion to be approximately 50% at the higher end of our historical range and above our expectations at the beginning of the year. This is driven by increased Talison dividends with higher sales volumes at Greenbushes and working capital improvements, including a significant focus on inventory and cash management across our operations.
This means that we expect fourth quarter cash conversion to be lower than recent quarters due in part to cash outflows associated with the workforce reductions we announced today as well as the timing of JV dividends. As a reminder, we account for our 49% interest in the Talison JV via the equity method. Therefore, the impact to cash flows is in dividends received. As we have said before, we expect dividends to be lower than normal this year and into 2025 as Talison completes the CGP3 capital project at the Greenbushes Mine. I'm pleased to see that our efforts to improve operating cash flow conversion are yielding results. We will continue driving toward free cash flow breakeven through our ongoing ramp of new capacity, inventory management, bidding events, cost out and productivity measures and other cash conversion improvements.
Turning to Slide 12, I will provide a few comments on current lithium market conditions, which have shown some positive signs. On the supply side, there have been several announced upstream and downstream curtailments. Non-integrated hard rock conversion is unprofitable and larger integrated producers are under pressure. We estimate that at least 25% of the global resource cost curve is unprofitable or operating at a loss. On the demand-side, grid storage demand continues to surprise to the upside, up 36% year-to-date led by installations in the U.S. and China. Global electric vehicle registrations are up 23% year-to-date led by China and demand growth in the United States is also up double-digits.
Slide 13 breaks down global EV demand growth by region. China represents 60% of the overall EV market with continued strong year-to-date demand growth of more than 30% in line to slightly ahead of initial expectations. In terms of demand mix, we have seen stronger growth in plug in hybrid sales in China as current subsidies are more balanced between battery EVs and plug-in hybrids. Chinese plug-in hybrids include range extended vehicles with battery sizes somewhere between traditional battery EVs and plug-in hybrids.
Meanwhile, the softest demand region globally is Europe where EV sales growth is down slightly year-to-date due to reduced subsidies and weaker economic conditions. Potential price cuts and the drive toward EU emission targets represent rebound opportunities in 2025. North American sales are up 13% year-to-date, far stronger than suggested by recent headlines. U.S. EV sales trends have strengthened in the back half of the year benefiting from increased model availability and affordability.
Looking further out on Slide 14. Longer-term, we continue to expect lithium demand growth to expand by 2.5 times from 2024 to 2030. The global energy transition remains well underway supported by consumer preferences, government policies and technological advancements. From an affordability perspective, the global EV supply chain is on-track to achieve the critical $100 per kilowatt hour tipping point where EVs are at purchase price parity with ICE vehicles. The Chinese industry has likely surpassed that target with the rest of the world not far behind. Overall, these trends continue to reinforce our belief in the long-term growth potential of the industry.
With that, I'll now hand it back to Kent.
