The Pilbara Minerals Ltd (ASX: PLS) share price is in the spotlight after the ASX lithium share released its FY23 fourth quarter update.
June quarterly production update
The numbers that Pilbara Minerals announced were a record for production and sales.
For the three months to 30 June 2023, the production grew by 10% compared to the third quarter of FY23 to 162.8kt. Sales jumped 22% quarter on quarter to 176.3kt.
The ASX lithium share explained that the growth was driven by continued improvements in processing, with FY23 production meeting the top end of guidance.
While the quantity of its production and sales were good, the realised price that it sold its spodumene concentrate (raw lithium) for was 33% lower quarter on quarter to US$3,256 per tonne.
The combined effect of the numbers meant that revenue fell by 18% to $0.8 billion.
Costs slightly improved, with a 1% quarter on quarter fall in the unit operating costs (FOB) to A$628 per tonne.
Pilbara Minerals’ cash balance jumped by 24% to A$3.3 billion in just three months, which is an impressive build-up since March 2023. Cash was $0.6 billion at 30 June 2022.
Annual production
FY23 annual production was 620kt, which was an increase of 64%, while sales came to 607.5kt – a rise of 68%.
The realised sales price for the year was US$4,449 per tonne, an increase of 87% compared to FY22. The company is significantly benefiting from the rising demand for lithium batteries. Annual revenue jumped by 238% to $4 billion.
The annual unit operating cost (FOB) increased by 11% to A$613 per tonne.
Project progress
The business is working on growing its production and also a lithium hydroxide plant which helps in the process of turning raw lithium into battery-ready lithium.
It said that the P680 primary rejection facility, P1000 expansion project and POSCO joint venture lithium hydroxide plant remain “on schedule”.
A final investment decision for the mid-stream demonstration plant is imminent.
Pilbara Minerals also said a partnership process has commenced for a potential downstream joint venture for up to 300,000 tonnes per annum of future unallocated spodumene concentrate from the P1000 expansion.
Final thoughts on the Pilbara Minerals share price
The production was excellent, but the large reduction in the realised price was disappointing. Even at the lower price, the ASX lithium share was making a lot of cash flow.
At a pre-open price of $4.59, I don’t think it’s obvious great buying today. If the lithium price strengthens in the long-term then it could be a clear buy, but we can’t know that right now. Its projects should help it boost profit when they’re operational.
