A strong half-year performance from Mineral Resources (MinRes) is a product of the company’s diversified portfolio, with its lithium, mining services and iron ore units all performing well.
MinRes generated underlying EBITDA (earnings before interest, taxes, depreciation and amortisation) of $939 million in the first half of the 2022–23 financial year (FY23), up 503 per cent from the first half of FY22.
Statutory net profit after tax (NPAT) jumped more than 1800 per cent to $390 million between the corresponding half-years.
MinRes’ performance in the half-year just gone paled in comparison to the first half of FY22, where the company posted an underlying net loss after tax of $36 million in the wake of struggling iron ore prices.
MinRes boss Chris Ellison noted in light of the company’s difficult first half of FY22 that the results did not reflect “the substantial progress in our iron ore, lithium and gas businesses during the last six months”.
Well if MinRes’ first half of FY23 results are anything to go by, he was right, with record earnings from the conversion of Mt Marion and Wodgina spodumene concentrate into lithium battery chemicals.
“The first-half performance was further underpinned by consistent mining services earnings and an improved contribution from iron ore on the back of higher achieved prices,” the company said in its first half of FY23 report.
MinRes’ mining services division delivered production volumes of 138 million tonnes in the first half of FY23 and was awarded three new contracts with Tier 1 clients.
With iron ore prices on the mend, MinRes shipped 8.7 million tonnes of the commodity in the half-year, with the company also making significant progress at its “low-cost, long-life and low-risk” Onslow Iron project.
MinRes also initiated a takeover bid for oil and gas player Norwest Energy during the half-year, with the Norwest directors unanimously recommending the revised offer in recent weeks.
The company’s performance underpinned a $1.20 interim dividend for its shareholders.
“Our first half was headlined by record lithium earnings from conversion of Mt Marion and Wodgina spodumene concentrate into lithium battery chemicals,” Ellison said.
“This was underpinned by consistent mining services earnings and a return to positive iron ore earnings due to improved product discounts.
“Over the past 12 months, the business has been restructured for growth in each of our four business pillars.
“We have locked in substantial growth in each of these business divisions for the next five years and built the foundations that will set up MinRes for the next 50 years.”
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