The Pilbara Minerals Ltd (ASX: PLS) share price is in focus after the ASX lithium share reported its FY24 result.
Pilbara Minerals is one of the largest lithium miners in the world, it currently has a major operating project called Pilgangoora.
FY24 result
Here are some of the highlights from the 12 months to 30 June 2024:
- Revenue fell 69% to $1.25 billion
- EBITDA sank 84% to $538 million
- Underlying net profit after tax (NPAT) plummeted 86% to $318 million
- Statutory NPAT plunged 89% to $257 million
- Operating cash flow fell 86% to $513 million
- Cash balance declined 51% to $1.6 billion
This result came after the ‘realised’ price that it sold its production for declined 74% to US$1,176 per tonne. Pilbara Minerals produced 17% more spodumene concentrate (raw lithium) in FY24, of 725.3kt.
In terms of the company’s efforts to increase its production, the ASX lithium share said its P680 project’s crushing and ore sorting facility started commissioning in the June quarter and the P1000 project – which aims to produce 1 million tonnes of spodumene concentrate – is progressing “on schedule and budget”.
During August, the company announced that a binding takeover to acquire 100% of South American-based ASX lithium share Latin Resources Ltd (ASX: LRS).
The company also announced today that it has received credit-approved commitments from a banking group for a new A$1 billion debt facility in the form of a revolving credit facility. This will refinance its existing project debt and further strengthen the company’s balance sheet. Having a good balance sheet is important for Pilbara Minerals shares, particularly in the current lower lithium price environment.
Management comments
The Pilbara Minerals Managing Director and CEO Dale Henderson said:
The successful completion of the P680 primary rejection facility was a significant milestone, enabling record production and sales. The operating performance of this facility also demonstrated scale unit cost benefits that can be expected to be further improved upon with completion of the upcoming P1000 Project. Beyond this current expansion, the P2000 project pre-feasibility study was completed offering a potential further growth step in production for the future.
Our strategic objective to enter lithium chemical manufacturing progressed as planned, with production commencing at the POSCO Pilbara Minerals’ JV chemical plant in South Korea. We also advanced our joint study with Ganfeng for a potential new downstream JV, which remains on track and aligned with our long-term growth strategy.
…With a resilient balance sheet, Pilbara Minerals maintains a strong competitive position relative to many peers within the sector.
The 2025 financial year promises to be another exciting year for Pilbara Minerals. The focus will remain on building on our strengths; extending our low cost position as a scale operator; disciplined capital deployment to scale the operation in lock-step with lithium market growth and preserving our strong balance sheet.
Outlook for the Pilbara Minerals share price
The ASX lithium share’s success for the foreseeable future will depend on what the lithium price does. If global electric vehicle sales keep growing, as they seem to be doing over the longer-term, then the lithium price could recover. But, I wouldn’t count on that because various lithium suppliers are ramping up production, including Pilbara Minerals.
It’s a great operator within the industry, with strong margins. It’d be pick in the lithium sector, but I’m not looking to buy shares in the current environment unless it seems like EV sales are going to return to the previous growth rate seen before this bump in the road.
