Scott Tozier
Executive Vice President and Chief Financial Officer at Albemarle
Thanks, Kent, and good morning, everyone. I'll begin on Slide 5. During the quarter, we generated net sales of $1.1 billion, a year-over-year increase of 36%, including the FCS business, which we sold in June last year. This is due primarily to increased pricing as well as higher volumes driven by strong demand from diverse end markets, especially for our lithium and bromine businesses. For the first quarter, net income attributable to Albemarle was $253 million, up $158 million from the prior year because of the strong net sales, partially offset by inflationary cost pressures. This includes the impact of natural gas prices in Europe on our Catalysts business. Adjusted diluted EPS for the first quarter was $2.38. The primary adjustments to earnings were $0.07 add-back for a loss on property sales and a $0.19 add-back for tax-related items. On Slide 6, I'll walk you through our first quarter adjusted EBITDA.
For the first quarter, our adjusted EBITDA was $432 million, up 107% year-over-year. The primary driver [Technical Issues] pricing, driven by the move to index-referenced variable price contracts and higher market pricing. Lithium also benefited from the sales of lower-cost inventories, including a onetime sale of spodumene stockpiled during the initial start-up of Wodgina. Bromine was also favorable year-over-year, reflecting higher pricing driven by tight market conditions and a slight uptick in volumes. That was partially offset by raw material and freight inflation. Catalysts was down relative to the prior year, primarily driven by higher raw material costs and lower volumes. That was partially offset by pricing. And lastly, corporate expense and foreign exchange were mostly flat year-over-year. Moving to Slide seven. We have meaningfully increased our 2022 outlook, primarily to reflect continued strength in our lithium business. I'll discuss our lithium outlook in greater detail in just a minute. For the total company, we now expect 2022 net sales to be in the range of $5.2 billion to $5.6 billion, up about 60% to 70% versus prior year. Adjusted EBITDA is expected to be between $1.7 billion and $2 billion, reflecting a year-over-year improvement of 120% at the midpoint of the range. This implies a total company EBITDA margin in the range of 33% to 36%. And together, this translates to updated 2022 adjusted diluted EPS guidance in the range of $9.25 to $12.25 compared to $4.04 in 2021.
Additionally, we are maintaining our capex guidance range of $1.3 billion to $1.5 billion as we drive our lithium investments forward to meet increased customer demand. You may have noticed that we widened the range of our outlook to prudently reflect greater volatility in pricing for sales and inflation for cost of goods sold against the backdrop of a turbulent macro environment. And regarding the quarterly progression of sales and EBITDA, on our last call, we indicated that we expected Q1 to be our strongest quarter of the year, primarily due to higher pricing and sales of low-cost inventory. Given the continued strong pricing and rising volumes, we now expect our second half results to be about 55% of the total year. Turning to the next slide for more detail on our lithium outlook. Lithium's full year 2022 EBITDA is expected to be up 200% to 225% year-over-year, up from our previous outlook for growth of around 75%.
We now expect our average realized selling price to be about double last year. This is the result of our efforts to move toward index-referenced variable price contracts and a significant increase in index prices. We also have better line of sight to price in the full year. From the beginning of the year to today, indices are up between 85% and 125%. We're also assuming that our expected Q2 selling price remains at that level for the rest of the year. If current market prices remain at historically strong levels for the balance of the year, there would be upside to this guidance. There could also be additional upside if we transition additional existing contracts from fixed to variable pricing. However, if we see material declines from current market pricing or volume shortfalls, there would be downside to this guidance. There's no change to our lithium volume outlook for the year. We still expect year-over-year volume growth in the range of 20% to 30% as we bring on new conversion assets, particularly La Negra III and IV and Kemerton I. For bromine, we are raising our full year 2022 EBITDA expectations with a year-over-year improvement of 15% to 20%. This revised guidance reflects higher pricing related to strong fire safety demand, supported by macro trends such as digitalization and electrification.
We also expect higher volumes following our successful expansion last year in Jordan. For catalysts, 2022 EBITDA is expected to be flat to down 65% year-over-year. This is below our prior outlook due to significant cost pressures, primarily related to natural gas in Europe and certain raw materials and freight, partially offset by higher pricing. The large outlook range for catalysts reflects increased volatility and lack of visibility, particularly related to the war in Ukraine. Given the extraordinary circumstances and the resulting changes in oil and gas markets, the business is aggressively seeking to pass through higher natural gas pricing to its customers. As previously discussed, we continue to expect a strategic review of the Catalysts business to be completed later this quarter. The review is intended to maximize value and position the business for success while enabling us to focus on growth. I will now turn to Slide nine for a deeper dive on our lithium contracts and pricing. With the change in guidance, you can now see we have more exposure to changing market indices. Our segmented approach gives more flexibility to customers while still allowing Albemarle to preserve its upside and returns on our growth investments. This slide reflects the expected split of our 2022 revenues updated for current pricing.
Battery-grade revenues are now expected to make up 70% to 80% of our 2022 revenues, of which 20% is expected to be from purchase orders on higher short-term pricing; about half are expected to be from contracts with variable pricing mechanisms, typically index-referenced with a three- to six-month lag; and the remaining 30% is from fixed price contracts. These fixed contracts also have price opener mechanisms to change prices over time. We continue to work with these customers to transition to contracts with variable index-referenced pricing. These negotiations are ongoing and progressing well. If we are successful, this could provide additional upside to our current outlook for the lithium business. Following our last earnings call, we received a lot of questions regarding our expected lithium margins, so I wanted to provide some additional color on the moving pieces on Slide 10. We expect lithium margins to improve in 2022, driven by higher pricing, partially offset by the progressive commissions we pay in Chile under our CORFO contract.
Another item to consider is the impact from higher fixed costs related to the start-up and ramp of our new facilities such as the Wodgina mine and our La Negra and Kemerton conversion assets as well as the potential acquisition of the Qinzhou conversion plant. These plants are expected to more than double our lithium production. Over time, the impact of fixed costs on margins will diminish as production ramps and costs are absorbed. As a reminder, Albemarle calculates EBITDA by including joint venture equity income on an after-tax basis. This year, because of higher spodumene transfer pricing from our Greenbushes mine, this tax impact is much more meaningful than it has been in the past. This is simply a result of a line item where the tax hits our income statement. Albemarle remains fully integrated from resource to conversion. So effectively, we pay ourselves this higher spodumene pricing. On a completely pretax basis, lithium EBITDA margins are expected to be between 55% and 60% in 2022. Slide 11 highlights our expected volume ramp as our new lithium conversion facilities are completed. Last year, we converted 88,000 metric tons LCE including conversion at Silver Peak and Kings Mountain, Xinyu and Chengdu in China, and La Negra I and II in Chile.
We are in the process of more than doubling conversion capacity with the expansions at La Negra and Kemerton, plus the acquisition of the Qinzhou plant. We typically expect it to take about two years to ramp to full capacity at a new plant, including roughly six months for customer qualification. Tying all of this together, we expect to achieve 200,000 [Technical Issues]. Total lithium volumes are expected to be higher than that, including technical-grade spodumene sales of about 10,000 tons per year, tolling volumes of anywhere between 0 and 20,000 tons per year, depending on market dynamics and the [Technical Issues] spodumene, plus any additional conversion capacity we buy or build during this period. Finally, let's turn to Slide 12 to look at our strong balance sheet and cash flow. Our 2022 revised operating cash flow guidance is $650 million at the midpoint. Relative to 2021, you can see incremental cash flow driven by the higher net income, adding back higher depreciation. This is partially offset by higher working capital related to higher sales volumes and pricing, plus higher cost of raw materials and inventories.
As a reminder, working capital typically averages about 25% of net sales. Our balance sheet is in great shape with $463 million of cash and liquidity of almost $2 billion. Current net debt to adjusted EBITDA is approximately 1.9 times. With rising EBITDA from higher pricing and volumes, we expect leverage to remain at or below our target range of two to 2.5 times. Our balance sheet supports the capex for our lithium investments to meet growing customer demand. Following our equity offering early last year, we repaid debt with the intention of relevering as needed to fund capital projects. We are actively evaluating options to do just that. We are planning to be in the debt market this quarter if market conditions are favorable. We remain committed to maintaining our investment-grade credit rating, and the debt markets provide a favorable avenue of acquiring additional capital. With that, I'll turn it back to Kent for an update on our projects on Slide 13.
