Mineral Resources Limited (ASX:MIN) has provided its financial results for the full year ended 30 June 2020.
HIGHLIGHTS:
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An 18% improvement in the Total Recordable Injury Frequency Rate and another year of zero Lost Time Injury incidents, a strong achievement across the MRL team of more than 3,100 employees and contractors;
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Completion of the sale of a 60% interest in Wodgina to Albemarle Corporation (NYSE: ALB, Albemarle) and establishment of the 60:40 Albemarle/MRL unincorporated MARBL Lithium Joint Venture (MARBL JV), providing MRL the opportunity to participate in the lithium hydroxide market on an accelerated basis while preserving optionality for future capacity expansions. The transaction returned the Company to a net cash position and, through MARBL, delivers MRL a 40% stake in the lithium hydroxide modules being built by Albemarle in Kemerton;
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Mining Services production volumes increased by 65% year on year as a result of a number of new external contracts and the increase in internal volumes;
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Iron ore exports totalled 14.1 million wet metric tonnes (wmt), up 33% on pcp; and
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Mt Marion increased production of spodumene by 17%, despite the challenging lithium market.
The FY20 performance has continued the Company’s track record of generating very strong returns for shareholders. Since listing on the ASX in 2006, the Company has delivered an average annual post-tax return on invested capital of 27%, which has enabled MRL to grow cashflow through cycles while maintaining a strong balance sheet and delivering a 19% per annum increase in dividends to our loyal shareholders.
The coronavirus (COVID-19) pandemic did not impact the Company’s financial performance in FY20. MRL recognised the seriousness of this pandemic early and adopted the strategy to keep everyone employed and the workplace virus free. To achieve this, MRL procured the world’s leading, gold standard, COVID-19 Polymerase Chain Reaction (PCR) equipment, to screen every person prior to entering site. To date, 45,000 tests have been completed and this program will continue until COVID19 is no longer a threat. By implementing these actions, MRL was able to protect jobs and shield our employees and their families from this virus, enabling the Company to maintain and increase production and benefit from current high iron ore prices.
The Company generated record statutory Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) of $2.01 billion. This result included a $1.30 billion gain on the disposal of a 60% interest in the Wodgina Lithium Project (Wodgina). Underlying EBITDA was $765 million, up 77% on the prior corresponding period (pcp), underpinned by strong growth in both MRL’s Mining Services and Commodities operations.
Statutory Net Profit After Tax (NPAT) amounted to $1.002 billion and underlying NPAT was $334 million, up 63% on pcp. Statutory NPAT included $200 million of post-tax impairment charges ($286 million pre-tax) relating to the write-down of capitalised exploration and mine development expenditure, intangibles, plant and equipment and stockpiles.
The Directors have resolved to distribute a fully franked final dividend of 77.0 cents per share for shareholders. The final dividend, together with the interim dividend of 23.0 cents per share, makes a total fully franked dividend for FY20 of 100.0 cents per share.
MRL’s Managing Director Chris Ellison said:
“This has been the most extraordinary year in the Company’s history. It is a credit to the entire MRL family that we have been able to withstand the impact of COVID-19 to keep our people safe and employed. Our guiding principle that drove all of our actions, and continues to drive everything we do, was to keep all of our people in jobs so that they could support their families with certainty.
“Notwithstanding the fact that the impact of COVID-19 dominated much of the past financial year, MRL has delivered record production and record profitability. We expanded our blue-chip client base for the Mining Services division and advanced our Commodities division’s strategy to develop long-life projects that provide predictable volume and income streams for the Mining Services division.
“MRL has entered FY21 with a strong balance sheet and positive momentum in our operations. We remain vigilant to the ongoing threat posed by COVID-19, as well as opportunities for which we can quickly and efficiently deploy the Mining Services capabilities that are the hallmark of our Company.
“We remain committed to financial discipline and using our innovative approach to deliver outstanding outcomes for our team, our customers and our shareholders.”
