The Lynas Rare Earths Ltd (ASX: LYC) share price is in the green despite the company revealing a significant fall in its quarterly sales revenue.
Right now, shares in the S&P/ASX 200 Index (ASX: XJO) rare earths producer are trading 2.14% higher at $6.67.
Lynas share price lifts on quarterly report
Here are the key takeaways from Lynas' report on the three months ended 31 March:
- Sales revenue came in at $237.1 million – up 9% quarter-on-quarter (QoQ) but down 28% year-on-year (YoY)
- Sales receipts came to $229.2 million – a 36% improvement QoQ but a 12% slump YoY
- Average selling price dropped to $48.3 a kilogram – down 25% on the prior comparable period
- Total rare earth oxide production slumped to 4,349 tonnes – down 2% QoQ and 12% YoY
- Neodymium and praseodymium (NdPr) production jumped to a record 1,725 tonnes – a 14% QoQ improvement and a 2% jump on the prior comparable period
- The company closed the period with $1.1 billion of cash and short-term deposits
The company noted demand for its NdPr production from customers outside of China remained strong last quarter.
Update on the company's Malaysia licence blow
Lynas also provided more detail on the impacts of Malaysia's Atomic Energy Licensing Board's move to ban the company from importing and processing lanthanide concentrate. The ban is set to come into effect in July.
It would force the company to shut down its Malaysian cracking and leaching plant and transition to using mixed rare earth carbonate produced at its Kalgoorlie Rare Earths Processing Facility as feedstock for downstream processing.
Thus, if the cracking and leaching plant is shut, the company's entire Malaysian facility will follow suit until new feedstock can be received. That's likely to be in August.
However, due to the unpredictable nature of the Kalgoorlie facility's ramp-up, the Malaysian facility's restart is unpredictable and would be followed by a period of reduced production.
Lynas' appeals against the Atomic Energy Licensing Board's decision are due to be heard next week.
What's next?
Looking forward, Lynas highlighted a current oversupply of rare earths products was impacting the materials' value. The oversupply was driven by a 19% increase in production quotas in China for the first half of 2022.
It says future price trends will depend on China's economic recovery and anticipation of Chinese production quotas for the second half of this year.
Finally, the company is targeting feed-on at its Kalgoorlie facility in the current quarter. The final phase of the project's major construction has now kicked off.
Lynas share price snapshot
This year has been a rough one for the Lynas share price.
The stock has tumbled 13% since the start of 2023. It's also 30% lower than it was this time last year.
Comparatively, the ASX 200 has gained 6% year to date and fallen 3% over the last 12 months.
