Mineral Resources Limited (ASX: MIN) has announced its financial results for the half-year ended 31 December 2022 (1H23).
MinRes generated underlying earnings before interest, tax, depreciation, amortisation and impairment of $939 million, up 503% on the prior corresponding period.
The Company delivered a strong first-half performance, driven by record Lithium earnings from the conversion of both Mt Marion and Wodgina spodumene concentrate into lithium battery chemicals. The first-half performance was further underpinned by consistent Mining Services earnings and an improved contribution from Iron Ore on the back of higher achieved prices.
Group underlying earnings after tax were $387 million, up $423 million on pcp. Statutory net profit after tax was $390 million, up $370 million on pcp. Operating cash flow of $281 million was up $399 million on pcp from increased earnings with corresponding increases in working capital associated with the conversion of MinRes’ spodumene concentrate into lithium hydroxide.
MinRes’ board has declared a fully franked interim dividend for FY23 of $1.20 per share. The dividend is due to be paid on 30 March 2023 to shareholders on the register at 10 March 2023.
MinRes delivered a strong and stable 1H23 with achievements including:
- No Lost Time Injuries and maintaining low Total Recordable Injury Frequency Rate of 2.81
- First lithium battery chemicals earnings from Wodgina spodumene concentrate feed
- Record lithium battery chemicals earnings from Mt Marion under the tolling agreement with Jiangxi Ganfeng Lithium Co. Ltd (Ganfeng)
- Extended Ganfeng tolling agreement to December 2023, with an option to extend to December 2024
- Final Investment Decision (FID) made to develop the Red Hill Iron Ore Joint Venture assets as part of the Onslow Iron project, with construction on the project progressing well
- Off-market scrip takeover bid for Norwest Energy NL (ASX: NWE) (Norwest), with the revised offer unanimously recommended by Norwest Directors subsequent to 1H23
Financial highlights:
- Revenue $2,350M, up 74%
- Underlying EBITDA $939M, up 503%
- Underlying earnings after tax $387M, up 1,175%
- Net profit after tax $390M, up 1,890%
- Diluted earnings per share 202cps, up 1,888%
- Interim dividend declared 120cps
- Operating cash flow $281M, up 333%
- Capex $741M, up 84%
- Net assets $3,493M, up 7%
- Return on invested capital 18.4%, down from 23.9%
“MinRes had a strong and stable first half, with solid earnings set to deliver shareholders a $1.20 fully franked interim dividend. We are well set up for an excellent year, with our balance sheet and performance across all areas in a great position,” managing director Chris Ellison said.
“Our first half was headlined by record lithium earnings from conversion of Mt Marion and Wodgina spodumene concentrate into lithium battery chemicals. This was underpinned by consistent mining services earnings and a return to positive iron ore earnings due to improved product discounts.
“Over the past 12 months, the business has been restructured for growth in each of our four business pillars.
“We have locked in substantial growth in each of these business divisions for the next five years and built the foundations that will set up MinRes for the next 50 years.
“This half has seen us take the business from a mining services contractor and upstream miner to a leading downstream supplier of lithium to global auto manufacturers.
“In lithium, we are expanding our fully integrated battery chemicals business through the restructure of the joint venture with Albemarle. Owning the rock and converting it into battery chemicals, sold by MinRes, means we capture more margin of the value chain.
“In iron ore, we are progressing plans to unlock stranded deposits at our game-changing Onslow Iron project, which will transition us to a low-cost, long-life iron ore producer.
“In energy, we are pursuing opportunities to secure reliable, low-cost natural gas to power our operations, transition away from diesel and coal-fired power and unlock downstream potential.
“In mining services, our innovative and cost-effective solutions in crushing, haulage and port services are gaining international attention and potentially leading to new options offshore.
“We’re also taking MinRes to the world by exploring options outside of Western Australian across the business.
“This financial year is set up for a strong run home, with the pieces in place for an exciting second half that should deliver even better results, as we consistently do.”
