Mineral Resources Limited (ASX: MIN) has released its financial results for the six-month period to 31 December 2024.
Highlights
Solid underlying financial results despite weaker price environment:
- Revenue of $2,290 million, down 9% (1H24: $2,515M).
- Underlying EBITDA1 of $302M, down 55% (1H24: $675M).
- Underlying NPAT of ($196M), down 200% (1H24: $196M).
- Statutory NPAT of ($807M), down 252% (1H24: $530M) after including ($352M) of post-tax impairment charges primarily related to Bald Hill, and ($232M) post-tax translation impact on foreign currency denominated balances.
Strong liquidity position maintained while funding peak investment for Onslow Iron:
- Receipt of $1,100M upfront payment for the sale of a 49% interest in the Onslow Iron haul road.
- Receipt of $780M initial cash consideration from the gas transactions with Hancock Prospecting Pty Ltd.
- Available liquidity of $1,520M (FY24: $2,833M), including cash on hand of $720M (FY24: $908M).
- Net debt of $5,084M (FY24: $4,428M).
Mining Services:
- Delivered record underlying EBITDA of $379M, up 49% (1H24: $254M), consisting of production EBITDA of $350M and inaugural Onslow Iron Road Trust EBITDA of $29M.
- Production volumes stable at 136M wet metric tonnes (wmt) (1H24: 139Mt).
- Commenced two new contracts (rehabilitation and mining) and renewed four existing external crushing contracts.
Iron Ore:
- Shipments totalled 9.7M wmt across all hubs, up 11% (1H24: 8.7M wmt).
- Onslow Iron development progressed well, with production of 6.3Mt (100%) and shipments of 4.6Mt (100%). Onslow Iron turned operating cash flow positive from November, with carry loan ($794M) starting to be repaid.
- Weighted average achieved price of US$83 per dry metric tonne (dmt), down 25% (1H24: US$111/dmt) reflecting a weaker Platts 62% IODEX.
Lithium:
- Shipments totalled 261k dmt SC6, up 28% (1H24: 204k dmt SC6).
- Bald Hill was placed into care and maintenance in November 2024.
- Weighted average achieved price of US$820 per dmt SC6 (1H24: US$1,719/dmt SC6).
Energy:
- Transaction entered into with Hancock for MinRes assets in the Perth Basin and Carnarvon Basin for total potential consideration of up to $1,131M.
- Part of the Hancock transaction was completed – the sale of 100% of Exploration Permits 368 and 426 – with receipt of initial consideration of $780M on 18 December 2024.
Commenting on the results, MinRes managing director Chris Ellison said:
“Across the first half we made huge progress in ramping up production at Onslow Iron, a project that will transform the quality of our earnings across commodities and mining services.
“I’m pleased to report all parts of the Onslow Iron pit-to-ship supply chain were operational, with the first three transhippers performing beyond expectations at this stage of the ramp-up.
“Transhippers four and five are due to arrive at the Port of Ashburton in February and April respectively, with each vessel adding seven million tonnes per annum capacity to the project.
“January shipments were operating at an annualised run rate of 18 million tonnes, well on the way to the Onslow Iron’s nameplate capacity, before we lost eight days of transhipping to Severe Tropical Cyclone Sean.
“The cyclone dropped an extraordinary amount of rain on parts of the Pilbara and the deluge was exacerbated days later by a low-pressure system that dumped more heavy rain inland.
“These weather events caused significant flooding that damaged parts of the Onslow Iron haul road. We have decided to repair the damage with cement stabilisation and to resurface the haul road with asphalt, which will significantly reduce downtime and maintenance costs. Haulage will continue on the haul road while these works are carried out.
“I acknowledge investors’ focus on our balance sheet, which reflects a period of high construction spend at Onslow Iron. Capital expenditure peaked in the first half and Onslow Iron is now generating positive cash flow, which will enable us to accelerate efforts to deleverage the balance sheet. Nonetheless, the Board took the prudent step to temporarily halt dividend payments.
“Record underlying earnings of $379 million in the first half from Mining Services – which had another standout period – was offset by the impact of weakness in iron ore and lithium prices.
“The Lithium division responded to a sustained tough global market by further reducing costs and improving performance, with the benefits of these measures coming to the fore late in the half, which coincided with a modest recovery in prices.
“We made the decision to preserve the Bald Hill orebody for when market conditions improve and placed the Yilgarn Hub in care and maintenance. At the same time, our head office workforce was reduced to align with revised operational requirements.
“During the half we highlighted our ability to crystallise value for shareholders with the completion of the $1.1 billion divestment of a 49% stake in the Onslow Iron haul road. We also received the first $780 million payment from Hancock Prospecting, which has become a partner in our Energy business.
“It has been a challenging six-month period for MinRes, but our Company has a history of weathering storms and coming out stronger. It is a credit to the dedication and professionalism of the MinRes team that we remain in a strong position and well placed to deliver improved performance going forward.”
