ASX 200 lithium share IGO slips despite record half-year profits and dividends

IGO reported record half-year production and earnings at its Greenbushes project.

Key points
  • IGO share price slips more than 2% on open
  • The ASX 200 lithium share reported record half-year profits and revenue
  • IGO declared a record interim dividend of 14 cents per share

S&P/ASX 200 Index (ASX: XJO) lithium share IGO Ltd (ASX: IGO) is down 2.42% in early trade.

Shares in the leading lithium stock closed yesterday trading for $15.68 and are currently changing hands for $15.30 apiece.

This comes following the release of the company's half-year results for the six months ending 31 December (H1FY23).

Read on for the highlights.

a mine worker holds his phone in one hand and a tablet in the other as he stands in front of heavy machinery at a mine site.

Image source: Getty Images

IGO share price slips despite profits hitting all-time highs

The IGO share price is in the red despite the ASX 200 lithium share reporting a series of new financial records.

Those included a record half-year of underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) of $834 million. That's up 269% from the $226 million reported in the first half of the 2022 financial year.

Net profit after taxes (NPAT) was also a new half-year record, coming in at $591 million, up from $91 million in H1FY22. That was driven by record production and earnings at the company's Greenbushes project.

Meanwhile, IGO's revenue was up 43% year on year to $542 million. IGO reported its first revenue contribution from the Forrestania project during the half year.

The ASX 200 lithium share held cash on its balance sheet of $590 million as at 31 December with net debt of $175 million.

And investors will be pleased with the 14 cents per share, fully franked interim dividend that management declared. That's also a new record.

The period was marred by the death of former CEO Peter Bradford on 15 October, which IGO's acting CEO Matt Dusci said was "a devastating shock to the IGO family".

What did management say?

Commenting on the results, Dusci said:

Strong lithium prices combined with a growing production profile at Greenbushes, generating outstanding financial returns for shareholders, while the team continues to focus on expanding the mine and processing capacity to deliver on future production growth.

At Kwinana, the declaration of commercial production from Train 1 was a key milestone for the half-year and we remain focused on progressing the ramp up of Train 1 and Financial Investment Decision on Train 2 over CY23.

As for IGO's nickel segment, Dusci added:

Our group nickel business result was impacted by a fire at the Nova Operation in December, offset by improved nickel prices during the period. At Cosmos, we delivered a revised development plan in September and project development activity is progressing well.

IGO share price snapshot

The IGO share price has been a strong performer over the past 12 months, up 30% despite today's dip.

And investors who bought into the ASX 200 lithium share five years ago will be sitting on gains of 215%.

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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