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MP Materials says its Q1 net income up 431% on strong rare earth prices and higher production

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(Kitco News) - On Thursday, MP Materials (NYSE: MP) announced record quarterly revenue, net income and adjusted EBITDA due to higher rare earth prices, production and sales in Q1 2022.

The company said that 10% increase in rare earths production volumes in Q1 2022 (10,828 tonnes) compared to the first quarter of 2021 (9,849 tonnes) was due to improvements in the efficiency of its processing operations, mainly from higher ore feed rates and recoveries, as well as slightly higher mill uptime.

The company's revenue increased 177% year-over-year, driven by increases in the realized price of rare earth oxide in concentrate and metric tonnes of REO sold. The 135% increase in realized price compared to the first quarter of 2021 was due to higher demand for rare earths driving increased market prices.

Adjusted EBITDA increased 301% year-over-year, driven by higher per-unit profitability, partially offset by higher personnel and other general and administrative costs, and advanced projects and development costs.

Net income increased 431% year-over-year, driven by significantly higher Adjusted EBITDA in the first quarter of 2022. Adjusted Net Income increased by 316% year-over-year to $96.3 million, mainly due to higher Adjusted EBITDA, partially offset by higher income tax expense related mainly to higher pre-tax earnings.

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The company added that diluted earnings per share ("EPS") increased 400% year-over-year to $0.45 driven by the higher net income. Adjusted Diluted EPS increased 285% to $0.50 due to the increase in Adjusted Net Income.

"The MP team delivered strong execution and performance in the first quarter, highlighted by record quarterly revenues and profitability. We benefited from our continued focus on cost discipline and strong realized pricing," said Chairman and CEO James H. Litinsky. "We are making steady progress on our goal to restore the full rare earth supply chain to the United States, including our Stage II project at Mountain Pass and our initial Stage III magnetics facility in Texas."

MP Materials is the largest producer of rare earth materials in the Western Hemisphere. The company owns and operates the Mountain Pass rare earth mine and processing facility in California, North America's only active and scaled rare earth production site.

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