Lynas share price lifts off on rocketing FY22 profits

Lynas is the only substantial producer of rare earths outside China.

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Key points

  • Lynas share price gains on FY22 results
  • Revenue leapt 88% year on year
  • NPAT was up 244% from FY21

The Lynas Rare Earths Ltd (ASX: LYC) share price is up 2.13% in late morning trade, having earlier posted gains of 5.8%.

Lynas shares closed yesterday trading for $8.92 and are currently trading for $9.11.

This comes following the release of the S&P/ASX 200 Index (ASX: XJO) rare earth producer's full-year results for the 12 months ending 30 June (FY22).

And there's certainly plenty of ASX investor interest today, with more than $32 million worth of trades having gone through within the first hour of trading.

So, why are investors bidding up the Lynas share price today?

What's piquing ASX investor interest?

As the only substantial producer of rare earths outside China, Lynas has seen strong demand from the United States and other nations looking to secure sources of the critical minerals outside of the Middle Kingdom.

Today, the Lynas share price is marching higher as investors eye FY22 revenue of $920 million, an 88% year-on-year leap.

And profits were way up from FY21 as well, with net profit after tax (NPAT) rocketing 244% to $540.8 million.

While the ASX 200 rare earths producer didn't offer specific guidance for FY23, Lynas did highlight its ongoing growth plans, stating:

Our expansion initiatives will support the further growth and development of outside China supply chains, including the re-establishment of a rare earths supply chain in the United States.

With cash on hand as at 30 June of $966 million, Lynas arguably looks to be in a strong position to pursue those growth ambitions.

Lynas share price snapshot

Despite a sharp retrace in 2022, the Lynas share price remains up by around 37% over the past 12 months. That compares to a full-year loss of around 5% posted by the ASX 200.

Longer term, Lynas shares have gained 443% over five years, smashing the 24% return delivered by the benchmark index.

Motley Fool contributor Bernd Struben 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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