Shares of Australia’s Pilbara Minerals fell sharply on Thursday after first-half profit slumped 78% on weak lithium prices and as the pure-play lithium miner withheld dividends to preserve capital for its project investments.
The Perth-based miner’s stock was down 1.6% at A$3.60, as of 0003 GMT, after losing as much as 3% earlier in the day.
The lithium miner’s underlying profit after tax fell to A$273 million ($178.79 million) in the six-month period ended Dec. 31, from a profit of A$1.24 billion a year ago, missing market consensus by about 15%.
“Overall, not much new in release, but headline numbers are soft,” Jarden analysts said in a note.
Lithium prices declined significantly from record highs marked a year ago, largely offsetting an increase in Pilbara’s sales volumes for the first half of fiscal 2024, it said in a statement.
Pilbara received average realized prices for its spodumene concentrate of $1,645 per dry metric ton (dmt), sharply lower than $4,993 per dmt a year ago.
Its spodumene concentrate production during the first half grew by 4% to 320.2 thousand tons (kt), with sales rising 7% to 306.3 kt.
“With the company’s low unit cost structure and strong balance sheet, Pilbara Minerals is uniquely placed to better withstand periods of softer pricing,” the miner said.
In the first half, it did not declare a dividend to “reinforce balance sheet” and invest in projects. Last year, it had declared an interim dividend of 11 Australian cents per share – its first dividendsince it went public in 2007.
The miner forecast its fiscal 2024 capital expenditure at between A$820 million and A$875 million.
($1 = 1.5270 Australian dollars)
(By Rajasik Mukherjee; Editing by Maju Samuel and Sherry Jacob-Phillips)
