The Pilbara Minerals Ltd (ASX: PLS) share price is under the spotlight after the ASX lithium share reported its FY24 half-year result.
Pilbara Minerals is one of Australia’s biggest lithium miners, and it aims to keep growing its production.
Pilbara Minerals HY24 result
Here are some of the financial numbers from the first six months:
- Sales volumes increased 7% to 306.3kt
- Realised price fell 67% to US$1,645 per tonne of spodumene concentrate (raw lithium)
- Revenue dropped 65% to $757 million
- EBITDA fell 77% to $415 million
- Cash margin from operations sank 71% to $536 million
- Net profit after tax (NPAT) down by 82% to $220 million
The company was pleased to report that its EBITDA margin remained strong at 55% for the period.
It ended the period with a cash balance of $2.14 billion, which was only a reduction of 4%.
In an effort to maintain its strong financial position, the Pilbara Minerals board decided not to declare a dividend for this result.
Project progress
Pilbara Minerals said commissioning has started on train 1 at the chemical plant joint venture between Pilbara Minerals and POSCO in South Korea.
It also made a final investment decision to construct the mid-stream demonstration plant project.
Both of these moves are in pursuit of having a presence in more of the lithium value chain, allowing it to capture more of the margin.
Pilbara Minerals also said the Pilgangoora’s ore reserves have increased by 35% to 214mt. A study has commenced to explore further expansion of production capacity beyond 1mt per year.
The company’s Pilgangoora operation power strategy has been released, which is expected to materially reduce power-related emissions intensity and unit costs over time.
Outlook for the Pilbara Minerals share price
The company said its low unit-cost structure and strong balance sheet will enable it to better withstand periods of soft pricing while continuing to build its production base to capitalise on improving pricing conditions.
Its success for the foreseeable future depends on what happens with the lithium price. If more electric vehicles keep being manufactured, then this should increase demand for lithium and possibly increase the lithium price, if supply growth doesn’t keep up.
If the lithium price is going to rebound, then this is the period of time to look at ASX lithium shares. I’m not going to call it a buy right now – its strong balance sheet seems to be giving investors confidence. I think it’s a quality operator in the space though.
