Lynas (ASX:LYC) share price jumps amid record interim net profit

The rare earths miner has posted positive results for the first half of FY22.

| More on:
A mining worker wearing a hard hat, orange high vis vest and blue long-sleeved shirt raises his fists in celebration with an excited expression on his face

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Lynas posts a near four-fold surge in 1H 22 net profit to $156.9m
  • Miner is benefitting from the electric vehicle revolution with its share price gaining over 60% in the past year
  • Lynas paints a positive outlook as it advances its growth projects

The Lynas Rare Earths Ltd (ASX: LYC) share price is rallying this morning after the ASX miner posted a sharp rise in revenue and profit for the six months ending December 2021.

Shares in Australia's largest rare earths miner are 3.58% higher at $9.27 in early trade following the release of the results.

Lynas share price bolstered by record first half profit

Highlights from Lynas' first-half FY22 results include:

  • Net profit after tax (NPAT): A$156.9m (1H 21: A$40.6m)
  • Revenue: A$314.8m (1H 21: A$202.5m)
  • EBIT: A$161.9m (1H 21: A$46.1m)
  • EBITDA: A$189.8m (1H 21: A$80.6m)
  • Cost of sales: A$140.3m (1H 21: A$150.8m)
  • Closing cash and short term deposits: A$674.2m (1H 21: A$512.6m).

Part of the green metals boom

Lynas is benefitting from the global electric vehicle revolution that is powering our lithium miners like Allkem Ltd (ASX: AKE) and Pilbara Minerals Ltd (ASX: PLS).

One of the commodities Lynas produces is Neodymium-Praseodymium (NdPr), or magnets used in motors.

As with the skyrocketing price of lithium, NdPr prices are also booming and have jumped to over US$100/kg. This is its highest in 11 years.

Another factor that may be bolstering the Lynas share price today is its cost control. Most miners, including Rio Tinto Limited (ASX: RIO), are complaining about inflationary pressure. But attentive investors will be pleased that Lynas' cost of sales fell during the period versus 1H 21.

Growth projects

Lynas continues to invest in building the business under its Lynas 2025 Strategy. Its Mt Weld resource is part of its growth plan and it is expecting to accelerate investment in this project.

The miner said that Mining Campaign 4-1 commenced and the resource extension drilling program was completed towards the end of 2021.

Lynas is also making progress on the Kalgoorlie Rare Earths Processing Facility. All necessary approvals have been secured for the processing facility and Lynas is stepping up construction activities.

Another pleasing development is the environmental approval for its Malaysian plant in December 2021. This has been a key risk factor that was hanging over the Lynas share price for a while.

Commentary from management

Speaking on the results driving the Lynas share price today, Managing Director, Amanda Lacaze, commented:

Our team remains highly focused on delivering results, whilst managing the ongoing challenges of the pandemic.

Pleasingly, a number of Lynas 2025 growth project milestones were achieved during the half year and subsequently which will provide a strong foundation to meet accelerating demand growth.

Our customers expect demand will grow strongly as we move further into FY22, and we are positioning the business to meet accelerating demand through our Lynas 2025 growth projects.

Lynas share price snapshot

The Lynas share price has surged by 64% over the past 12 months. However, it's lost around 16% since the start of the calendar year.

In contrast, the S&P/ASX 200 Index (ASX: XJO) has only managed to gain a modest 2.6% over the past year.

Motley Fool contributor Brendon Lau owns Lynas Corporation Limited, Allkem Ltd, and Rio Tinto Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Earnings Results

Two happy excited friends in euphoria mood after winning in a bet with a smartphone in hand.
Earnings Results

ASX 200 stock jumps 10% on strong FY24 results

How did this KFC restaurant operator perform in FY 2024?

Read more »

A male investor wearing a white shirt and blue suit jacket sits at his desk looking at his laptop with his hands to his chin, waiting in anticipation.
Consumer Staples & Discretionary Shares

Guess which ASX 200 stock just slashed its final dividend by 23%

This retailer had a tough time during the 12 months. Here's how it performed.

Read more »

Man jumps for joy in front of a background of a rising stocks graphic.
Earnings Results

Catapult shines: 20% sales growth propels ASX tech stock to new 52-week high

A strong annual result from this tech player has caught investor attention.

Read more »

A man in his 30s holds his laptop and operates it with his other hand as he has a look of pleasant surprise on his face as though he is learning something new or finding hidden value in something on the screen.
Earnings Results

Xero share price leaps 8% on staggering earnings upheaval

A major turnaround in profitability is sending investors into a frenzy over Xero shares today.

Read more »

a construction worker sits pensively at his desk with his arm propping up his chin as he looks at his laptop computer while wearing a hard hat and visibility vest in a bunker style construction shed.
Materials Shares

Which ASX 200 stock just plunged 12% despite record full-year earnings?

It looks like an impressive report card but UBS doesn't like the FY25 guidance.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Earnings Results

ASX 200 tech stock lifts off on another record-setting half-year profit

Investors are bidding up the ASX 200 tech company following its half-year results.

Read more »

increasing rural asx share price represented by happy looking sheep
Earnings Results

Why is this ASX All Ords stock staying strong as profits crash 76%

How is this company's share price marching higher after mowing down more than three-quarters of its profits compared to a…

Read more »

Two men sit side by side on a couch with video game controls in their hands and expressive looks on their faces as they react to the action in front of them in a home setting.
Earnings Results

Guess which ASX 200 stock is surging 11% on an 'outstanding' result

This ASX gaming giant just posted a 17% jump in profits, and its shareholders are basking in the glory.

Read more »