The Lynas Rare Earths Ltd (ASX: LYC) share price is gaining this morning on the back of the company's report for the December quarter.
After opening 0.5% higher at $9.13, stock in the S&P/ASX 200 Index (ASX: XJO) rare earths producer has lifted further to reach $9.36 – a 3.08% increase at the time of writing.
Lynas share price lifts as NdPr production jumps 44%
Here are the key takeaways from the company's latest quarterly update:
- Sales revenue reached $232.7 million – up 42% quarter on quarter and 15% on the prior comparable period (pcp)
- Sales receipts came to $168.4 million – down 28% quarter on quarter but up 11% on the pcp
- Produced 4,457 tonnes of rare earth oxide – up 27% quarter on quarter and 6% on the pcp
- Neodymium and praseodymium (NdPr) production came to 1,508 tonnes – up 44% quarter on quarter and 11% on the pcp
- Ended the period with $934.2 million of cash and short-term deposits
What else happened last quarter?
The Lynas share price had a good run in the December quarter, gaining around 4% over the three-month period.
Meanwhile, the company continued its mining campaign at Mt Weld. Ore processing efficiencies also saw the project delivering a record volume of rare earth oxides in concentrate.
It continued building a lanthanide concentrate stockpile for the Kalgoorlie Rare Earth processing facility start-up. Finally, capital works are underway at Lynas Malaysia to receive and process Kalgoorlie-made mixed rare earth carbonate feedstock.
All that means the company's capital expenditure cash outflow increased 31% quarter on quarter and 73% year on year to $141.9 million last quarter.
What did management say?
Within Lynas' quarterly CEO review, Amanda Lacaze appears to comment:
Production and sales outcomes in the December quarter recovered following the water supply disruptions experienced in the prior quarter.
Sales receipts, at $168.4 million, were a reflection of timing of deliveries which occurred later in the quarter. A higher sales price was achieved for SEG and new La-Ce speciality products which improved our average selling price despite flat market pricing with an average China Domestic Price for NdPr of US$83 per kilo during the quarter.
Market prices started to increase again from December in anticipation of the late January Lunar New Year holidays and an expected rebound of the consumption in China. Future pricing trends will depend on China's economic recovery.
What's next?
The company is still working on developments at its Mt Weld, Kalgoorlie, and Malaysian operations. It's also developing a rare earths separation plant in the United States.
It previously forecast capital expenditure of $600 million in both financial year 2023 and financial year 2024.
Lynas share price snapshot
This year so far has been good to the rare earths giant's shares. The Lynas share price is up 18% year to date while the ASX 200 has lifted around 8%.
Over the last 12 months, however, the stock has risen just 1.4% while the index is up 7.5%.
