The Galaxy Resources Limited (ASX: GXY) share price is pushing higher on Friday after the release of its full year results.
At the time of writing the lithium miner’s shares are up over 2% to $1.06.
How did Galaxy perform in FY 2019?
For the 12 months ending December 31, Galaxy reported a 55% decline in revenue to US$69.5 million.
Galaxy’s revenue was impacted by a 46% decrease in spodumene prices and a 17% decrease in sales volumes. The average realised selling price for spodumene sold was US$502/dmt, down from US$927/dmt a year earlier.
On the bottom line, the lithium miner posted a net loss after tax of US$283.7 million. This was largely the result of non-cash write downs and impairments of US$245.9 million. These include inventory write downs of US$23.6 million and property write downs of US$173.1 million at its Mt Cattlin operation.
Chief Executive Officer, Simon Hay, commented: “Challenging market conditions prevailed in the lithium sector in 2019 due to lower than expected demand in China coinciding with an increase in supply of lithium from spodumene and brine producers. This impacted prices broadly and Galaxy’s sales volumes, resulting in lower earnings compared to the prior financial year.”
“In areas within our control, Galaxy performed well with records set across many key performance indicators at Mt Cattlin including record spodumene production and low unit costs. At the Sal de Vida project, our process team developed a simplified project flowsheet which has many technological and cost advantages,” he added.
Mr Hay advised that the coronavirus has impacted negotiations with its customer base in China.
As these customers are not in a position to conclude purchases due to constraints on many aspects of their businesses, management will not be providing any sales guidance at this stage.
However, the chief executive appears optimistic on its long term outlook. He said: “Despite the current headwinds facing the lithium industry, Galaxy remains well positioned to invest in its growth project at the bottom of the commodity cycle and meet a period of double-digit lithium demand growth. Successful operations at Mt Cattlin and a robust balance sheet underpins the Company’s strategy to leverage off its world-class assets to unlock further value for shareholders.”