Lynas Rare Earths has reported a record profit as it moves to rapidly expand output on the back of strong demand for ex-China supply of its key products essential to the rapid growth starting in the electrification of the economy.
Lynas is the major non-Chinese supplier of rare earths globally from its Mount Weld mine in WA and processing facilities in Malaysia, under construction in WA and soon in the US.
The company reported a net profit after tax of $540.8 million, up from $157.1 million in 2020-21.
Full year revenue jumped from $489 million in 2020-21 to $920 million as output rose and prices surged.
Lynas’ performance in the June 30 year is similar to that experienced by lithium groups such as Pilbara Minerals, SQM, Albemarle and Allkem.
After Lynas earned a first half net profit of $156.9 million (from the $40.6 million a year earlier) Lynas saw its June (second half) result surge to record levels.
Costs rose modestly to $348.4 million from $302.2 million in the latest financial year.
Cash on hand jumped to more than $965 million from $681 million a year earlier, meaning Lynas will have more than enough to finance the $500 million expansion of the Mount Weld mine.
CEO Amanda Lacaze said in Friday’s statement
“Closing cash at $965.6m allows us to confidently progress our various growth initiatives. This is important as Lynas is uniquely positioned with a resilient supply chain for rare earth materials from our facilities in Western Australia and Malaysia to our partners in Vietnam, Japan and Europe. This is valued by our key customer base.
“Favourable market conditions and strong demand for Lynas’ rare earth materials saw sales revenue increase by 88.1% and Net Profit After Tax (NPAT) increase by 244% from the 2021 result.
“Rare earths prices were sustained at high levels during the second half of the year, and the NdPr market price remained 70% to 80% higher than in the same period last year,” Ms Lacaze continued.
“Ongoing measures implemented across the business mitigated some of the challenges presented by the external environment, including shipping delays, input cost increases, water supply issues and the ongoing effects of the COVID-19 pandemic. The Lynas team prioritised production to meet the needs of our customers and remained focused on growing the business to support customer growth,” she said.
