Mineral Resources (MinRes) has announced its financial results for the half-year ended 31 December 2024.
Key items include the following:
Solid underlying financial results despite weaker price environment:
- Revenue of $2,290 million (M), down 9% (1H24: $2,515M).
- Underlying EBITDA[1] of $302M, down 55% (1H24: $675M).
- Underlying NPAT of ($196M), down 200% (1H24: $196M).
- Statutory NPAT of ($807M), down 252% (1H24: $530M) after including ($352M) of post-tax impairment charges primarily related to Bald Hill, and ($232M) post-tax translation impact on foreign currency denominated balances.
Strong liquidity position maintained while funding peak investment for Onslow Iron:
- Receipt of $1,100M upfront payment for the sale of a 49% interest in the Onslow Iron haul road.
- Receipt of $780M initial cash consideration from the gas transactions with Hancock Prospecting Pty Ltd.
- Available liquidity of $1,520M (FY24: $2,833M), including cash on hand of $720M (FY24: $908M).
- Net debt of $5,084M (FY24: $4,428M).
Mining Services:
- Record underlying EBITDA of $379M, up 49% (1H24: $254M), consisting of production EBITDA of $350M and inaugural Onslow Iron Road Trust EBITDA of $29M.
- Production volumes stable at 136M wet metric tonnes (wmt) (1H24: 139Mt).
- Commenced two new contracts (rehabilitation and mining) and renewed four existing external crushing contracts.
Iron Ore:
- Shipments totalled 9.7M wmt across all hubs, up 11% (1H24: 8.7M wmt).
- Onslow Iron development progressed well, with production of 6.3Mt (100%) and shipments of 4.6Mt (100%). Onslow Iron turned operating cash flow positive from November, with carry loan ($794M) starting to be repaid.
- Weighted average achieved price of US$83 per dry metric tonne (dmt), down 25% (1H24: US$111/dmt) reflecting a weaker Platts 62% IODEX.
Lithium:
- Shipments totalled 261k dmt SC6, up 28% (1H24: 204k dmt SC6).
- Bald Hill was placed into care and maintenance in November 2024.
- Weighted average achieved price of US$820 per dmt SC6 (1H24: US$1,719/dmt SC6).
Energy:
- Transaction entered into with Hancock for MinRes assets in the Perth Basin and Carnarvon Basin for total potential consideration of up to $1,131M.
- Part of the Hancock transaction was completed – the sale of 100% of Exploration Permits 368 and 426 – with receipt of initial consideration of $780M on 18 December 2024.
Commenting on the results, MinRes Managing Director Chris Ellison said the first half had delivered huge progress ramping-up production at Onslow Iron - a project transforming the quality of the company's earnings across commodities and mining services.
“I’m pleased to report all parts of the Onslow Iron pit-to-ship supply chain were operational, with the first three transhippers performing beyond expectations at this stage of the ramp-up," Ellison said.
“Transhippers four and five are due to arrive at the Port of Ashburton in February and April respectively, with each vessel adding seven million tonnes per annum capacity to the project."
January shipments from Onslow Iron were operating at an annualised run rate of 18 million tonnes, well on the way to the Onslow Iron's nameplate capacity, before eight days of transhipping were lost due to Severe Tropical Cyclone Sean.
Ellison acknowledged MinRes investors’ focus on the company's balance sheet, which reflects a period of high construction spend at Onslow Iron.
"Capital expenditure peaked in the first half and Onslow Iron is now generating positive cash flow, which will enable MinRes to accelerate efforts to deleverage the balance sheet," he said.
"Nonetheless, the Board took the prudent step to temporarily halt dividend payments."
Record underlying earnings of $379 million in the first half from Mining Services was offset by the impact of weakness in iron ore and lithium prices.
“The Lithium division responded to a sustained tough global market by further reducing costs and improving performance, with the benefits of these measures coming to the fore late in the half, which coincided with a modest recovery in prices," Ellison said.
“During the half we also highlighted our ability to crystallise value for shareholders with the completion of the $1.1 billion divestment of a 49% stake in the Onslow Iron haul road.
"We also received the first $780 million payment from Hancock Prospecting, which has become a partner in our Energy business."
Ellison said it had been a challenging six-month period for MinRes, but the company has a history of weathering storms and coming out stronger.
"It's a credit to the dedication and professionalism of the MinRes team that we remain in a strong position and well placed to deliver improved performance going forward,” he said.
For more information, visit the MinRes Investor Centre.
[1] The reconciliation of underlying results, a non-IFRS measure, to the IFRS financial metrics reported is contained in note 3 of the half-year financial statements.
