Mineral Resources (ASX: MIN) has released its financial results for the year to 30 June 2022 and will be hosting an investor webcast at 8am AWST today.
During the year, MinRes continued its strong safety performance across the business despite a significant step-up in project development activities and an 18 per cent increase in employees. Our people are fundamental to our success and their physical and mental well-being is our number one priority.
MinRes generated underlying earnings before interest, tax, depreciation, amortisation and impairment (Underlying EBITDA)1 of $1.0 billion, down 46 per cent on the prior corresponding period (pcp). Earnings were negatively impacted in the first half by a steep decline in iron ore prices and widening of discounts, both of which stabilised in the second half.
With record lithium prices, first earnings from conversion of Mt Marion spodumene concentrate into lithium hydroxide and record growth in the Mining Services division, the company delivered a strong second-half performance.
Underlying earnings after tax were $400 million, down 64 per cent on pcp. Statutory net profit after tax was $351 million, down 72 per cent on pcp and including $10 million post-tax impairment charges in relation to intangible assets.
Operating cash flow of $344 million was impacted by an increase in working capital relating to the restart of Wodgina, the increase in lithium pricing causing receivables to increase, and first earnings from conversion of the company’s spodumene concentrate into lithium hydroxide.
In May 2022, MinRes successfully executed a new US$1.25 billion bond raise in the US debt markets. The company’s strong balance sheet and available cash of $2.4 billion continue to support MinRes’ growth outlook.
During the year, MinRes was included in the ASX50 index of Australia’s most-valuable listed companies.
The MinRes board of directors has declared a fully franked final dividend for FY22 of $1.00 per share.
Commenting on the FY22 result, Mineral Resources managing director Chris Ellison said:
“Against the headwinds of iron ore price and inflationary cost pressures and the pandemic still affecting our everyday operations, we achieved the second-best financial performance in our history while investing in major development projects that will set us up for the next 30 to 50 years.
“I am incredibly proud of what our team has delivered. Most importantly, we achieved this result in a safe and sustainable way while protecting the physical and mental well-being of our people.
“During the year, we successfully restructured the company into four operating pillars – Mining Services, Iron Ore, Lithium and Energy – that each have significant long-term growth prospects and will operate as a separate business drawing on MinRes’ centralised services. This is an important development which will allow us to better capture the enormous potential that we have built into MinRes – none more so than in the lithium space.
“MinRes began building a world-class, long-life lithium business in Western Australia more than a decade ago. Our foresight and investment are starting to bear fruit – today, we already are the largest ASX-listed spodumene concentrate producer and one of the first to derive earnings from lithium hydroxide. And we are just getting started as we apply our
industry leading scale and deep lithium expertise to move further along the electric battery value chain.
“The past year – our 30th in business – has been monumental for MinRes. We are well positioned for the future because we have the people and leadership, business model, assets and balance sheet to continue to deliver superior value to shareholders.”
