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Why the Mineral Resources Limited share price is climbing today

Shares in lithium miner and iron ore mining services business Mineral Resources Limited (ASX: MIN) climbed 3.5% to $15.70 today after the group handed in its report card for the financial year ending June 30, 2018. Below is a summary of the results with comparisons to the prior corresponding year.

  • Net profit up 35% to $272 million, versus $201 million in FY17
  • Revenue of $1,707 million, versus $1,470 million
  • Normalised EBITDA of $507 million, versus $464 million
  • Final dividend of 40cps, full year fully franked dividends of 65cps, up 20% on a 50% payout ratio
  • Sold 3.5 million tonnes of lithium direct ship ore form Mount Wodinga
  • Sold 382,000 tonnes of lithium spodumene from Mt Marion
  • $240 million cash in hand

Mineral resources is the Chris Ellison led business that was engulfed in controversy in late July after the share price spiked after the CEO gave a private briefing to a group of powerful institutional investors.

In what Mineral Resources termed an “investor discussion” its CEO reportedly let slip that the company expected future annual EBITDA totalling $600 million from its Wodinga Lithium project.

However, the company insisted that this estimate could be worked out by using publicly available information and as such there was no breach of Australia’s regulatory laws on the provision of inside information.

On the day of the private “investor discussion” the share price surged from an opening price of $15.41 to a closing price of $16.58, with Mr Ellison likely to be crossing certain fundies at the briefing off his Christmas card list.

Ironically, the stock has retreated back to $15.29 today with the company due to provide full year FY 2019 EBITDA guidance at its AGM later in the year.

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Motley Fool contributor Tom Richardson has no position in any of the stocks mentioned.

You can find Tom on Twitter @tommyr345

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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