MinRes signs off on transformational year with $165m full-year profit, positive outlook
Leading mining services company Mineral Resources (ASX: MIN) has signed off on a transformational year with a $165 million net profit for the year to June 30, built on revenue of $1.5 billion from its mining services and lithium and iron ore businesses. The profit included normalised earnings before interest, tax, deprecation and amortisation of $433 million, above the guided range of $360 million to $390 million. Directors declared a 31c per share fully franked final dividend. Managing director Chris Ellison described the past year as the most significant in the company's history because it had set MinRes up for long-term growth.
Mineral Resources (ASX: MIN) has announced its financial results for the full year ended 30 June 2019 and provided an update on initiatives carried out during the year as part of the Company’s strategy to become Australia’s leading integrated mining services provider.
The Company generated normalised Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) of $433 million for FY19. This was above guidance previously provided for FY19’s EBITDA of between $360 million to $390 million.
Profit for the Company, after providing for income tax and non-controlling interest, amounted to $164 million. The Company’s Directors have declared a fully franked final dividend of 31.0 cents per share.
During FY19, the Company delivered on a number of major initiatives including:
· Execution of a transaction with Albemarle Corporation (NYSE: ALB, Albemarle) to sell 60% of the Wodgina Lithium Project and form a 60:40 unincorporated joint venture, providing MRL the opportunity to participate in the lithium hydroxide market on an accelerated basis while preserving optionality for future capacity expansions. On completion of the transaction, Albemarle will pay the Company US$820 million and transfer a 40% interest in the first two 25,000 dry tonne per annum lithium hydroxide conversion units currently being built by Albemarle in Kemerton, Western Australia. This transaction remains subject to regulatory approvals and is expected to complete in calendar year 2019;
· Significant investments for future growth, with capital outlays of more than $850 million on key projects including:
· The construction of world-class lithium mining and processing facilities at Wodgina and Mt Marion;
· Acquisition of additional equity in Mt Marion to take MRL’s stake to 50%;
· Completion of the acquisition of the Koolyanobbing Iron Ore Project, allowing operations in the Yilgarn region to continue, and ramping up to a current annual run rate of 7.5 million tonnes per annum;
· Expanded iron ore investment in the Pilbara region with the acquisition of the Kumina iron ore tenements6 and establishment of a 50:50 joint venture with Brockman Mining Limited in relation to the Marillana Iron Ore Project;
· Achievement of substantial progress across the portfolio of innovation projects including:
· Production of five carbon fibre dump trays to date with two mobilised to Koolyanobbing during the year for on-site testing; and
· Successful commissioning of a pilot synthetic graphite plant; and
· Completion of MRL’s inaugural US$700 million senior unsecured notes offering due 20278 , representing an important financing milestone for MRL and aligning funding with the long-term nature of our operations and capital investments.
MRL’s Managing Director Chris Ellison said, “This past year has been the most significant in our Company’s history as we set MRL up for long-term growth.
"The financial results for FY19 reflect our strategic decisions and investments to lay the foundations for a strong future and are a testament to the hard work and dedication of the entire MRL team.
"We continue to be focussed on maximising the value of our world-class lithium ore bodies and our iron ore operations, while the infrastructure and innovation initiatives we have been developing during the past three to five years will provide us with industry-changing mining services capabilities.
"MRL has entered FY20 well-positioned to create long-term shareholder value through the development of our world-class resource assets and increased annuity-style earnings from enhanced mining services offerings.”