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MP Materials says its Q2 net income up 170% to $73.3 million on strong rare earth prices

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(Kitco News) - On Thursday, rare earth metals producer MP Materials (NYSE: MP) announced that in Q2 2022, its net income increased 170% year-over-year to $73.3 million due to higher realized rare earth prices.

In Q2 2022, the company produced 10,300 tonnes of rare earth oxides (Q2 2021: 10,305 tonnes). Production volumes compared to the second quarter of 2021 were essentially unchanged.

Revenue increased 96% year-over-year to $143.6 million, driven by increases in the realized price of rare earth oxide in concentrate. The 90% increase in realized price compared to the second quarter of 2021 was due to higher demand for rare earths driving increased market prices, the company said.

Adjusted EBITDA increased 137% year-over-year to $110.0 million, driven by higher per-unit profitability, partially offset by higher personnel and other general and administrative costs, as well as advanced projects and development costs. Per-unit profitability improvements were driven primarily by higher realized prices.

Net income increased 170% year-over-year to $73.3 million, driven by significantly higher Adjusted EBITDA in Q2 2022. Adjusted net income increased by 145% year-over-year to $81.9 million, mainly due to higher adjusted EBITDA, partially offset by higher income tax expense related mainly to higher pre-tax earnings.

Importantly, the company said that diluted earnings per share ("EPS") increased 153% year-over-year to $0.38, driven by the higher net income, while adjusted diluted EPS increased 139% to $0.43 due to the increase in adjusted net income.

"The MP team delivered another quarter of solid execution and strong financial performance. We benefited from higher pricing and tightly managed costs while adding talent to the team," stated Chairman and CEO James H. Litinsky. "We continue to progress toward completing Stage II construction, targeted for year end, and our initial Stage III magnetics facility in Texas is rapidly taking shape."

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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