Given the fourth quarter revenue boost announced late July, news of IGO’s (ASX: IGO) robust full year FY22 results shouldn’t have come as a mammoth surprise to the market this morning.
However, there was still enough daylight within this morning’s result for the ASX 200 miner to jump 1.62% an hour out from the open.
The group posted record underlying earnings of $717m, up 51% on full-year revenue to $903m, which jumped 34%.
FY22 marked the fourth consecutive year of record underlying earnings (EBITDA) for the group, which management attributes to strong operating performance at Nova and the first annual profit contribution from the company’s investment in the lithium joint venture; Tianqi Lithium Energy Australia Pty Ltd (TLEA).
But due to the one-off after-tax gain on the sale of Tropicana of $385m in the previous year, annual net profit (NPAT) was down -40% to $331m.
The interim and final dividend of 10 cents was unchanged from the previous year.
Having benefitted from higher commodity prices, sales at the Nova operation delivered at the top end of guidance for FY22 nickel and cobalt production, yet fell marginally short of guidance for copper production.
Adding to the strong expansion of the miner’s nickel business during the year was the successful completion of nickel miner Western Areas acquisition for $1.26bn in June 2022.
This transaction delivered a portfolio of operating and development stage mines, including:
The Forrestania Operation, which comprises the Flying Fox and Spotted Quoll underground mines and the Cosmic Boy processing facility
The Cosmos Project, which comprises the Odysseus underground mine development
A substantial broader exploration portfolio to IGO
Then there was the lithium joint venture with Tianqi Lithium Corporation’s fully integrated lithium business, which led to the commissioning of two new concentrators at the Greenbushes operation - in which IGO holds a 24.99% economic interest - resulting in record operating and financial results for Greenbushes in FY22.
The first train at the Kwinana Lithium Hydroxide Refinery was also commissioned and produced first battery grade lithium hydroxide in May 2022.
Underlying earnings (EBITDA) from Nova increased 45% YoY to $631m
Nova nickel production was within guidance at 26,675t
Cash costs better than guided at $1.95 per payable pound of nickel
The lithium business contributed $177m of net profit
Cash on balance sheet of $367m at 30 June 2022 and $900m
Tianqi delivered IGO a share of net profit of $177m and an inaugural dividend payment of $71m
Looking back over the year’s highlights, IGO’s CEO Peter Bradford told investors that the high-quality nickel and lithium businesses, combined with the portfolio of belt scale exploration projects - focused on discovery of nickel, copper, lithium and rare earths - gives the group a great platform to leverage off the growing demand for clean energy metals.
“Our focus over the coming year will be to continue to consolidate our transformative growth over the past two years, to build lithium capacity at Greenbushes and the Kwinana Refinery and bring Cosmos to first nickel production,” Bradford said.
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