Pilbara Minerals share price on watch following maiden $560m profit

Pilbara Minerals announced its FY22 earnings this morning. Here are the details.

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Key points

  • The Pilbara Minerals share price could make some moves today after the company announced its FY22 results
  • The company's top and bottom lines experienced significant growth, and the outlook remains very positive
  • A long-term deficit 1.8 million metric tonnes of lithium is expected in 2040

The Pilbara Minerals Ltd (ASX: PLS) share price will be in focus today after the company announced its FY22 results this morning.

Pilbara shares closed almost 4% higher on Monday at $3.17.

The mineral exploration company today announced significant growth in its top and bottom lines along with positive guidance posted over the long term.

Let's go over the highlights of the report.

What did Pilbara Minerals report?

The company announced its performance for top and bottom lines was buoyed by strong demand for lithium and spodumene concentrate. Results were also accelerated by the performance of its Pilangoora lithium-tantalum operation in Western Australia.

Other catalysts included the restart of its Ngungaju plant, capacity improvements for its Pilgan plant, and more favourable international prices of lithium. The average price per dry metric tonne stood at approximately $US2,605 for the year.

What else happened in FY22?

The company's strong financial performance in FY22 added a considerable amount of cash to its balance sheet, increasing to $874.2 million with letters of credit included, up from $99.7 million the year prior.

However, the company also increased its secured debt by $13.5 million to help it restart its Ngungaju operations. It was stated that the debt balance grew due to a weakening positioning of the Australian dollar against the US dollar, primarily due to rising interest rates.

What did management say?

Commenting on the results, Pilbara Minerals managing director and CEO Dale Henderson said:

FY2022 has been an incredible year for Pilbara Minerals, with our Pilgangoora Operation capitalising on the surging demand for lithium raw materials that we have experienced over the course of the year. The restart of the Ngungaju Plant during the year, together with capacity improvements at the Pilgan Plant enabled increased production volumes to sell into this strong pricing environment. The combination of strong operational performance and the significant increase in lithium pricing underpinned a robust inaugural profit result and has transformed the Company's balance sheet from the prior year.

What's next?

Pilbara Minerals included forecasts for the supply and demand lithium deficit for FY24 and beyond. By 2040, the deficit is expected to grow to approximately 1.8 million metric tonnes for its base case, and there is a further forecasted upside potential.

Other forecasts were included. The company stated its P1000 Pilgangoora expansion would deliver a total concentrate capacity of around 400,000 tonnes per annum, which will be realised in CY23.

More targeted upgrades are in the works, including the commissioning of the P680 Pilgan plant, which is forecast to deliver 100,000 kilo tonnes per annum delivered via $103 million spent in capital expenditure.

Pilbara Minerals share price snapshot

The Pilbara Minerals share price is currently down 10% year to date but is up 41% over the past 12 months.

By comparison, the S&P/ASX 300 Metal & Mining Index (ASX: XMM) is down 3.15% so far in 2022 and up just over 1% since this time last year.

The company's market capitalisation is $9.44 billion.

Motley Fool contributor Matthew Farley has no position in any of the stocks mentioned. 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 Scott Phillips.

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