Pilbara Minerals anticipates a loss of A$70 million for the first half of FY25 due to joint venture and one-off costs, despite strong earnings. Managing Director Dale Henderson remains optimistic about the lithium market's recovery and highlights the company's resilience.
Pilbara Minerals anticipates a loss of approximately A$70 million for the first half of fiscal year 2025. While the company has achieved strong earnings, it has been impacted by a combination of joint venture and one-off costs. Managing Director Dale Henderson expressed confidence in the lithium market's recovery, highlighting Pilbara's resilience amid the downturn.
He emphasized the company's record production and sales for the December half, as well as the successful completion of its P680 expansion project.Henderson stated that the underlying EBITDA and net result after tax reflect these achievements. Pilbara's Pilgangoora operation is projected to generate earnings between $71-75 million for the December half, with a net loss of $5-7 million. However, at the group level, earnings are significantly lower at $45-49 million, resulting in an after-tax loss of nearly $71 million. Several factors contribute to this financial performance, including a non-cash reduction in the carrying value of a call option to increase Pilbara's stake in its South Korean downstream lithium hydroxide monohydrate joint venture with Posco. Additionally, a share of JV losses and construction costs for the stalled midstream demonstration plant at the Pilgangoora hub in Western Australia have impacted the balance sheet.Despite these challenges, Pilbara holds a substantial cash balance of $1.2 billion at the start of the year, enabling it to withstand financial pressures. Henderson affirmed the company's faith in its South Korean JV, which is progressing as anticipated, and its midstream plant with ASX-listed Calix, which could restart construction following additional funding from the WA government. Assuming project reactivation, construction is expected to be completed in the December quarter, with Pilbara's remaining cost of $15 million fully offset by the state grant. Henderson mentioned scaled-back operations at Pilgangoora benefiting from efficiencies of the new P850 operating model and the commencement of ore delivery from the P1000 project on January 31st, expected to ramp up over the next six months. He also highlighted advancements in the company's chemicals strategy to increase exposure to value-added battery chemicals, diversifying its supply chain. While chemicals prices are currently lower, development and ramp-up costs remain under control, and the company remains optimistic about the long-term potential of these strategic investments and growth options, including the Ngungaju processing plant and Pilbara's recently acquired Brazilian project through its merger with Latin Resources. Henderson concluded by reiterating the company's positive outlook for the lithium market and its commitment to expanding the business in alignment with market dynamics
PILBARA MINERALS LITHIUM MARKET LOSS JOINT VENTURES EXPANSION CHEMICALS STRATEGY
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