The Pilbara Minerals Ltd (ASX: PLS) share price is on watch this morning after announcing a 243% increase in net losses after tax.
What does Pilbara Minerals do?
Pilbara is an Aussie lithium miner with significant operations in the Pilgangoora Lithium-Tantulum Project. Founded in 2005, Pilbara is a leading industry player and currently has a market capitalisation of $789.8 million.
Why is the Pilbara Minerals share price on watch?
Despite revenue climbing 96.7% to $84.1 million, the Pilbara Minerals share price is on watch after reporting a $99.3 million net loss after tax.
Pilbara Minerals did not declare a dividend for FY20 in line with its FY19 policy. Net tangible assets fell 15% lower to $0.17 per share in a tough year for lithium miners.
Softer market conditions in China and weaker customer demand made it a tough year for earnings. Pricing was weak which saw Pilbara Minerals moderate its production and draw down on existing stockpiles to reduce supply. This allowed a more flexible response to the coronavirus pandemic despite disruptions to its Chinese supply chain.
The Pilbara Minerals share price is up 14.5% in 2020. That’s despite the company completing its $111.5 million equity raising to strengthen its balance sheet and increase working capital.
Total ore mined for the year totalled 812,312 wet metric tonnes (wmt) with 642,215 wmt processed. The company secured a new long-term spodumene concentrate offtake partner in the second half of the year. The agreement sees Yibin Tianyi Lithium Industry Co Ltd take 75,000tpa of spodumene concentrate with an initial 60,000tpa to be supplied in calendar year 2020.
Spodumene concentrate produced in FY20 totalled 90,768 dry metric tonnes (dmt) with 116,256dmt shipped. Tantalie concentrate produced was 86,991 pounds with 143,336 pounds shipped as part of Pilbara Minerals’ drawdown strategy.
Subsequent to the year-end, Pilbara refinanced US$110 million of debt with BNP Paribas and the Clean Energy Finance Corporation (CEFC) to reduce its cost of funding from 12% to 5%.
The Pilbara Minerals share price will be one to watch in early trade as investors weigh up the latest result. The miner increased its cash balance by $22.7 million to $86.3 million thanks to the recent equity raising.
It’s been a tough year for lithium miners amid soft pricing and weaker demand. The Pilbara Minerals share price is worth watching after announcing the significant losses for FY20.