The Pilbara Minerals Ltd (ASX: PLS) share price is in focus after the ASX lithium share revealed a very strong start to FY23.
HY23 result
Here are some of the main highlights of the six months to 31 December 2022:
- Shipments of spodumene concentrate (lithium) increased 68% to 286,876 dry metric tonnes (dmt)
- Average realised sales price increased 305% to US$4,993 per dmt
- Total revenue up 647% to $2.18 billion
- Gross profit up 959% to $1.85 billion
- EBITDA (EBITDA explained) up 1,091% to $1.81 billion
- Net profit after tax (NPAT) up 989% to $1.24 billion
- Interim dividend of $0.11 per share
Pilbara Minerals said the result was underpinned by a record operating performance from its Pilgangoora project, as well as “positive pricing conditions” for lithium as global demand for raw materials continues to grow.
The ASX lithium share was successful at ramping up its Ngungaju plant to its capacity during the September 2022 quarter.
Pilbara Minerals also noted a strategy that focused on “maximising sales volumes by deliberately targeting a lower product grade to optimise product yield and maximise concentrate production.”
It finished the half-year with $2.23 billion of cash, up from $591.7 million at 30 June 2022.
Pilbara Minerals dividend announced
Following through with its commitment to start paying dividends, the first Pilbara Minerals dividend is $0.11 per share, fully franked. I think that’s helpful for the Pilbara Minerals share price.
It comes with an ex-dividend date of 2 March 2023, so investors have less than a week or so to gain entitlement to the dividend.
Management commentary
The Pilbara Minerals Managing Director and CEO, Dale Henderson, said:
This is an exceptional financial result. Our record operational performance, along with the positive supply and demand dynamics being experienced in the lithium market has enabled us to deliver a landmark $1.24 billion net profit for the half- year.
This result has enabled the board to declare an inaugural fully franked interim dividend of 11 cents per share. This is a huge milestone for Pilbara Minerals, and we are very pleased to be able to reward our shareholders who have had faith and stuck with us over the journey.
This strong financial performance provides the company a great platform, supporting our growth and diversification strategy to become a leading, sustainable battery materials supplier.
Final thoughts on the Pilbara Minerals share price
Pilbara Minerals has done a great job at capitalising on the strong lithium price, generating enormous cashflow and now it’s starting to pay dividends.
I’m not surprised that the market has reacted positively to this update – it’s currently up around 3%. How the ASX lithium share performs over the rest of the year could be down to lithium price movements.
I’m positive about the company’s future, but I think we need to be cautious about the business at the current high price.
