IGO (ASX: IGO) has continued its strong start in FY22, delivering $52.3m net profit in the December quarter, up 36% from the previous quarter.
Sales revenue of $188m was in line with the previous quarter (Q1 FY22: $189.2m) as higher commodity prices were offset by lower sales volumes due to timing issues.
At the flagship Nova project, nickel and cobalt production for the December quarter topped the company’s FY22 production guidance, with a respective 6,987t and 259t of nickel and cobalt produced.
Nickel cash costs of $1.73/lb for the quarter was “substantially” below its guidance range, supported by higher by-product prices, higher nickel production and lower unit production costs.
This resulted in earnings margins expanding to 65% in the December quarter, compared to 54% last quarter.
Subject to shareholder approval, IGO said its Western Areas (ASX: WSA) acquisition is targeted for completion in the June 2022 quarter.
IGO expects lithium prices to continue to trend higher in FY22, expecting chemical grade spodumene concentrate prices of approximately US$1,770/t in the second half versus US$592/t in the first half.
“Within the lithium joint venture, Greenbushes has delivered robust operating performance and good progress on the expansion projects. The Tailings Retreatment Plant is well advanced and expected to be commissioned in the March 2022 quarter,” said IGO Managing Director and CEO, Peter Bradford.
IGO reaffirmed its FY22 production guidance across all metals.
Nova’s nickel cash costs were $1.86/lb in the first half of FY22, significantly below the company’s guidance range of $2.00 to $2.40.
Management said it expects cash costs to be below its guidance range for the entirety of FY22, subject to the continuation of strong by-product pricing.
Finance Writer & Social Media
Get the latest news and media direct to your inbox