Mineral Resources Limited (ASX: MIN) has released its financial results for the half year ended 31 December 2023 (1H24).
Key points:
Solid underlying financial results:
- Revenue increased 7 per cent on prior corresponding period to $2,514.7M.
- Underlying EBITDA of $674.9M, representing an EBITDA margin of 27 per cent.
- Fully franked interim dividend of $0.20 per share.
Robust liquidity position maintained:
- Completion of US$1,100.0M Senior Unsecured Notes Offering in October 2023.
- Net debt at $3,546.7M and Net debt/Underlying EBITDA of 2.4x (calculated on a rolling 12-month basis).
- Available liquidity at 31 December 2023 of $1,783.1M, including cash on hand of $1,383.1M.
Safety:
- Maintained an industry leading Total Recordable Injury Frequency rate of 1.90.
- Lost Time Injury Frequency Rate was 0.18.
Mining Services:
- Production volumes of 139Mt within guidance.
- Delivered Underlying EBITDA of $253.7M.
- Awarded five new contracts and renewed three contracts with Tier 1 clients.
Iron Ore:
- Onslow Iron construction within budget and on target for first ore-on-ship in June 2024.
- Sales volumes of 8.7M wet metric tonnes (wmt) on track to guidance across both hubs.
- High prices and low product discounts delivered Underlying EBITDA of $266.2M.
Lithium:
- Mt Marion plant expansion commissioned, with 99k dry metric tonnes (dmt) of SC6 equivalent spodumene concentrate shipped, up 39%.
- Pre-strip activities at Wodgina well advanced and 87k dmt of SC6 equivalent spodumene concentrate shipped, up 36%.
- Acquired Bald Hill effective 1 November 2023, with 18k dmt of SC6 equivalent spodumene concentrate shipped.
- Completed the restructure of the MARBL joint venture in October 2023, increasing ownership in Wodgina to 50%. Received US$383.6M ($587.8M) from Albemarle Corporation.
Energy:
- High-quality clean gas has been intersected through further drilling activities at the Lockyer-3 appraisal well.
- Development application lodged for gas processing facility. Final Investment Decision expected in 2H24, subject to WA Government agreement for partial export.
MinRes has also used the occasion to announce a significant upgrade to the underground mineral resource at Mt Marion.
Commenting on the first-half results, MinRes managing director Chris Ellison said:
“A focus on delivery has our lithium, iron ore and mining services divisions on track to guidance this year and the transformational Onslow Iron project on time and on budget.
“MinRes’ diversified business model ensured a solid set of financial results despite weaker lithium prices, with revenue for the first half up 7 per cent to $2,514.7M. Underlying EBITDA of $674.9M was evenly split between lithium ($271.4M), iron ore ($266.2M) and mining services ($253.7M), with statutory net profit after tax of $518.0M. The decision to declare an interim dividend of $0.20 aligns with our disciplined financial approach given the current environment.
“Incredible progress was made on Onslow Iron over the half. We currently have more than 2,000 people working on the project, with first ore-on-ship on target for June 24. Our unique ‘build, own, operate’ model at Onslow Iron ensures we have full control over costs and project delivery despite the high inflationary environment. The in-house expertise that gives MinRes a competitive advantage was recognised with the creation of our fifth pillar, Engineering and Construction.
“We continued to invest in the Lithium business, with the acquisition of a third hard rock mine, Bald Hill, and the expansion of our footprint in Western Australia through strategic investments in the world’s most prospective ground.
“Shipments from Wodgina and Mt Marion were up significantly over the year. We took the opportunity with last year’s high prices to complete major pre-strip activity. Unit costs are now falling at both sites. Further reducing costs while prices are depressed remains a priority this half.
“Iron Ore was the half’s star performer as stronger prices and solid volumes drove up revenue 37 per cent to $1,329.4M. Mining Services was awarded five new contracts and renewed three contracts, including our first major contract in Queensland.
“The Energy division progressed our pathway to gas production. The processing facility’s development application has been submitted and a Final Investment Decision is due this half. Drilling continues at Lockyer-5, the fourth of 10 production wells. Our gas exploration program steps up in FY25, with nine wells planned after the purchase of a new automated rig, MinRes Explorer, significantly boosted our drilling capacity.
“MinRes continues to redefine the FIFO experience. Recent initiatives include direct flights from the east coast, couples moving into resort-style accommodation and the introduction of a la carte service.
“We are now expanding our mental health service with the recruitment of a team of counsellors who will provide expert support at our sites. We remain committed to investing in our 7,200-strong workforce, whose dedication and professionalism made this half’s impressive achievements possible.”
