Mineral Resources Limited (ASX: MIN) has today announced its financial results for the half year ended 31 December 2021 (1H22).
The company generated underlying EBITDA of $156 million, down 80% on the prior corresponding period. Earnings were negatively impacted by the collapse in iron ore prices and widening discounts. The underlying net loss after tax was $36 million, down 108% on pcp. Statutory NPAT was $20 million, down 96% on pcp.
In light of the company’s capital investment program, its underlying net loss after tax for 1H22 and volatile conditions in the iron ore market, the board has decided to not declare an interim dividend.
Mineral Resources remains on target to meet FY22 volume guidance of a 15-20% increase for the Mining Services division, spodumene export guidance of 450-475 ktpa and the revised full-year iron ore export guidance of 18.5-19.5 mtpa.
Alongside its 1H22 results, Mineral Resources has also announced:
- a non-binding agreement with Albemarle Corporation (NYSE: ALB) to expand the MARBL Lithium Joint Venture including a restructure of Wodgina’s ownership to 50/50 and a return of operatorship to Mineral Resources; and
- that it has taken control of its 51% share of the Mt Marion spodumene offtake and entered into an initial toll treatment agreement for the offtake to be converted into lithium hydroxide by Ganfeng Lithium Co in China. First lithium hydroxide sales are expected in May 2022.
Commenting on the 1H22 result, Mineral Resources managing director Chris Ellison said:
“This has been a challenging half as we continued to navigate the uncertainty of a COVID-19 world and maintained our focus on protecting the jobs of all our people.
“I am proud of the efforts of the more than 4,800 men and women in our business for their united and disciplined approach, which so far has enabled us to keep COVID-19 out of our operations.
“It hasn’t been easy and the challenges during 1H22 were amplified by the collapse in iron ore prices. This has delivered our worst first-half financial result in three years.
“These results do not reflect the substantial progress in our iron ore, lithium and gas businesses during the last six months, which will create significant value for decades to come and which underpins our long-term growth for our Mining Services division.
“Mineral Resources has a proud and unrivalled history of outperformance and delivering exceptional value for all stakeholders since we listed on the ASX in 2006.
“This history includes prudent and well-timed investments and, at all times, a disciplined financial approach without taking our focus away from our long-term goals that we set for this business. The Board’s decision to not declare an interim dividend aligns with the Company’s long-term approach to building sustainable success.
“COVID-19, particularly through the Omicron variant that has now arrived in Western Australia, will continue to prove a major challenge for our industry. However, we have the team and the can-do attitude to deliver on our strategy of creating a safe and supportive workplace for our people and lasting value for our shareholders.
“I am excited about what the second half, and beyond, promises for Mineral Resources.”