Mineral Resources Limited (ASX: MIN) has released its financial results for the year to 30 June 2023.
Key points:
Strong underlying financial results:
- Revenue up 40 per cent to $4.8 billion.
- Underlying EBITDA up 71 per cent to $1.8 billion, representing an EBITDA margin of 37 per cent.
- Fully franked final dividend of $0.70, bringing the FY23 total dividend to $1.90 (FY22: $1.00).
Healthy balance sheet and liquidity position:
- Net debt at $1.9 billion and Net debt/Underlying EBITDA of 1.1x.
- Available liquidity at 30 June 2023 of $1.8 billion, including cash on hand of $1.4 billion.
Lithium:
- Record earnings delivered, with Wodgina ramp up continuing and maiden lithium battery chemical earnings.
- Renegotiated MARBL joint venture agreement with Albemarle Corporation.
- Completed construction of the Mt Marion plant expansion.
- Significant Mt Marion exploration results confirm opportunity for open pit extensions and underground potential.
Iron ore:
- Final Investment Decision (FID) made to develop the Onslow Iron project.
- Onslow Iron received all major approvals, with construction well progressed.
- A $552 million non-cash, post-tax impairment to the Utah Point Hub and Yilgarn Hub assets.
Energy:
- Drilled two onshore natural gas discoveries in the Perth Basin.
- Completed the takeover of Norwest Energy NL.
Mining Services:
- Awarded six new contracts and renewed four contracts with Tier 1 clients.
Commenting on the FY23 results, MinRes managing director Chris Ellison said:
“MinRes continued to execute our high-growth strategy and I’m proud of what our team achieved on the major development projects that will set up MinRes for decades to come.
“We delivered a strong set of financial results, with underlying EBITDA up 71 per cent to $1.8 billion, revenue up 40 per cent to $4.8 billion and a full-year dividend of $1.90 per share, up 90 per cent.
“Our growth was driven by record lithium earnings, but we also faced operational challenges in the second half and were not immune from global inflationary pressures that impacted all businesses.
“Statutory net profit after tax of $244 million was impacted by non-cash impairment charges of our Yilgarn and Utah Point iron ore assets.
“These operations continue to play a part in our transition to a lower-cost, longer-life iron ore portfolio. We are investing in exploration to maximise the value potential from the Yilgarn, while options for Utah Point are being considered as part of the South West Creek development.
“Our flagship Onslow Iron project made enormous progress. All major approvals have been received, construction is on track and the project will start generating cash in 12 months.
“The tragic death of contractor employee Kieren McDowall, who lost his life during construction at the Ken’s Bore site in June, impacted all of us at MinRes. We are determined to learn from this tragedy and safety remains a top priority.
“In Lithium, we demonstrated agility by restructuring our joint ventures in response to the evolving market. The expansion of the Mt Marion plant was completed and a major exploration program revealed strong underground potential, while our ownership of Wodgina will increase to 50 per cent.
“The Energy division made another two natural gas discoveries in the Perth Basin. We have enough gas to help the Western Australian domestic market stay in long-term surplus, and to export to the world as LNG, but the significant capital investment required to maximise this potential is being held back by the current WA domestic gas policy.
“Mining Services, which remains the heart of our business, was awarded six new contracts with Tier 1 clients. The division will benefit from the ramp-up of activities across our operations and the deployment of its world-leading innovations.
“These achievements ensure we are well-placed for another year of transformational growth across all parts of our business that will continue to drive value for our shareholders.”
