Pilbara Minerals
(ASX:PLS), despite navigating a challenging global lithium price downturn primarily driven by China's market dynamics, has officially confirmed a highly profitable year in 2022-23. The company anticipates facing a more measured fiscal year ahead with increased calls on its cash reserves due to heightened investments, while also confronting its inaugural significant tax payment by the end of December.
While the forthcoming year expects a slower growth rate of around 5%, a significant decline from the previous year's remarkable 68% surge, Pilbara (PLS) showcased its resilience against the price decline through its June 30 production report. The report indicated record production and steady revenue, albeit slightly lower than earlier quarters in the same fiscal year.
In its recently released full-year financial report, Pilbara confirmed a final dividend of 14 cents per share, added to the initial shareholder payout of 11 cents per share in February, culminating in a substantial 25 cents per share for the year.
The company's statutory net profit surged to $2.4 billion after tax by June 30, up from $600 million the previous year. This was accompanied by a remarkable 242% increase in revenue, reaching $4.1 billion, while EBITDA experienced an impressive rise of 307% to $3.3 billion from $800 million.
Pilbara reported an impressive 464% surge in cash balance by June 30, amounting to $3.3 billion, which will be allocated to cover the forthcoming tax liability and increased investments—projected to potentially absorb almost $1 billion from these reserves, alongside the pending final dividend payout.
Moreover, the company spotlighted its strong performance for the fiscal year ending in June, showcasing a 64% surge in spodumene concentrate production, growing from 2022's 377,900 tonnes to 620,100 tonnes. Sales also experienced a notable 68% surge, increasing from 2022's 361,000 tonnes to 607,500 tonnes.
Pilbara emphasized its gross margin rise from 68% the previous year to an impressive 82%.
To top off the announcements on Friday, the company disclosed a significant 35% surge in ore reserves, totaling 214 million tonnes.
CEO Dale Henderson elaborated on the positive results, stating that this increase "has enabled us to commence a new study to explore further expansion of production capacity beyond P1000."
"This potentially opens the door for additional tonnage to be allocated for downstream and midstream growth opportunities which will be reviewed as part of the strategic partnering process with outcomes now targeting the March Quarter 2024."
Henderson underlined that the "FY23 period has been an exceptional year for Pilbara Minerals across all fronts." He emphasized the strong operational performance, the progression of the mine expansion, and advancements in the company's downstream chemicals strategy.
Looking ahead to the 2023-24 year, the company projects a slowdown in both production and sales. Production guidance ranges between 660,000 to 690,000 spodumene concentrate tonnes, representing an increase from the 620,100 tonnes achieved in 2022-23.
In addition to operating costs, Pilbara is bracing for a substantial tax bill. The full year tax liability for 2022-23 stands at $894.2 million, with $120.9 million paid in the 2023 year and the remaining $773.3 million to be settled between now and the end of the year (half one of 2023-24).
Furthermore, the company will see elevated spending compared to the $408 million invested in expansion programs in the year leading up to June. This included $138.3 million allocated to the P680 Project and $163.1 million to capitalized mine waste development.
Pilbara has delineated its investment plans for this year as follows:
- Growth capital expenditure, encompassing P680 and P1000 Projects: $490 million to $540 million
- Mine development: $140 million to $160 million
- Sustaining capital: $75 million to $85 million
- Projects and enhancements: $170 million to $190 million
