The Lynas Corporation Ltd (ASX: LYC) share price will be on watch this morning after the ASX miner released its half-year FY20 results to the market.
Stable revenue despite challenging market conditions
Lynas reported revenues of $180.1 million for the six months ending 31 December 2019, which was a very marginal increase on the $179.8 million recorded in 1H19.
Net profit after tax (NPAT) for the six-month period came in at $3.9 million. Meanwhile, Lynas recorded earnings before interest and tax (EBIT) of $8.4 million and earnings before interest, tax, depreciation and amortisation (EBITDA) of $44.2 million for the half-year.
The company recorded cash flows from operating activities of $39.1 million for the half-year, which compared to $41.2 million achieved in 1H19.
Lynas’ closing cash balance amounted to $111.8 million, which was up significantly on the closing balance of $53.7 million in the prior corresponding period (pcp).
The company noted that it was successfully able to meet neodymium and praseodymium (NdPr) demand from key customers, while also being able to successfully offset lower production volume and market prices. The latter was achieved by implementing a higher volume product mix.
Lynas also highlighted that it has made significant progress on its Lynas 2025 initiatives to diversify the company’s industrial footprint. This has been done by establishing new processing facilities in both Kalgoorlie and the United States.
Commenting on Lynas 1H20 results, CEO and Managing Director, Amanda Lacaze, said:
“This is a solid result given the difficult regulatory and market conditions we faced during the period. Improved portfolio pricing and reduced costs helped to compensate for the weak market pricing. Despite this, the team continued to meet the strong demand for NdPr from our key customers, particularly in Japan.”
Malaysian market remains challenging
The company noted that the regulatory environment in Malaysia remains particularly challenging. However, its Malaysian strategy was given a significant boost yesterday when the company announced the Malaysian government had renewed its operating licence for three years. This license will remain in place until early March 2023, subject to conditions being met.
Outlook for 2020
With regards to Lynas’ outlook for the remainder of FY20 and beyond, the company commented that it is particularly pleased to receive the renewal of its Malaysian license, and has worked diligently to develop its assets at Mt Weld and Kuantan. With both plants now successfully up and running, Lynas believes this will provide it with an excellent foundation to achieve its Lynas 2025 growth plans, which are now on track.
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