Pilbara Minerals FY24 Earnings Call Highlights

Pilbara Minerals (ASX: PLS) is trading flat on Monday despite reporting a 86% year-on-year drop in net profit. Here are the key insights from the company's earnings call.

FY24 Earnings Summary

• Production up 17% to 725,300 tonnes

• Realised spodumene price down 74% to $1,176 a tonne

• Revenue down 69% to $1.25bn

• EBITDA margin down 3,900 bps to 43%

• EBITDA down 84% to $538m

• Underlying profit after tax down 86% to $318m

• Cash balance down 51% to $1.62bn

• New $1bn debt facility to replace existing debt facilities

To add some perspective, Citi (as at 24-Jul) was expecting FY24 production of 725,000 tonnes at average realised prices of $1,183 a tonne and EBITDA of $556 million. While production was in-line, realised prices and EBITDA missed by 0.6% and 3.2% respectively.

Earnings Call Highlights

The below topics have all been answered by CEO Dale Henderson, CFO Luke Bortoli and CSO (Chief Sustainability Officer) Sandra McInnes.

FY24 results: “To summarise FY24, it was a year of solid performance and disciplined delivery across each of the pillars of our strategy. This was most evident in our projects and operations outcomes on plan outcomes that flowed through direct to the bottom line, delivering each element of our guidance.”

FY25 focus: "The focus will continue on the P680 and P1000 projects, which are fully funded, will give rise to lower unit costs, and put Pilbara Minerals in an even stronger position to benefit from higher prices.”

New debt facility: "The transaction structure also enables us to preserve our strong balance sheet and ensures that we are well-capitalized to fund both the existing near-term organic growth and the Salinas project here at the Latin Resources acquisition."

Capital management: “In order to further preserve our balance sheet strength in the current market environment, the Board has not declared a final dividend for the H2 FY24 period.”

Lithium price performance: "Market pricing has seen strong declines over the past year, and we have actually seen further softness of late, comparing FY23 to FY24, it's been a 67% decline over that period."

Lithium price impact: "We suspect that at these price levels, this will be a very difficult price point for many of the converters and suppliers through the industry."

P200 project: "We completed the PFS on the P2000 project in the June quarter. We will only progress with this expansion when it makes sense for our shareholders and partners."

Analyst Q&A Highlights

On provisional pricing adjustment: "Our expectation on the provisional pricing adjustment is relatively immaterial, and it's around about, let's call it, $16 million of net cash outflow."

On debt repayment: "It makes good financial sense to repay those facilities given our current cash balance, and we will save the interest cost associated with that."

On dividends: "The cash flow for the period didn’t actually support the payment of a dividend."

On spodumene price impact: "It would take a very material downside for us to actually utilise our facility."

This article was generated with the support of AI and reviewed by an editor.