The Pilbara Minerals Ltd (ASX: PLS) share price will be one to watch on Friday.
That's because the lithium giant has just released its FY 2023 results. How did it perform?
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Pilbara Minerals share price on watch following stellar profit growth
- Revenue up 242% to $4,064 million
- Earnings before interest, tax, depreciation, and amortisation (EBITDA) up 307% to $3,317.2 million
- Underlying profit after tax up 329% to $2,276.3 million
- Cash balance of $3,338.6 million
- Fully franked final dividend of 14 cents per share
- FY 2023 dividend of 25 cents per share
What happened in FY 2023?
For the 12 months ended 30 June, Pilbara Minerals reported a massive 242% increase in revenue to $4,064 million. This reflects a 68% increase in sales volumes to 607.5kt and an 87% lift in the average realised price to US$4,447 per tonne.
Thanks to operating leverage, Pilbara Minerals' EBITDA margin increased from 68% to 82% in FY 2023. This underpinned a whopping 307% jump in EBITDA to $3,317.2 million for the 12 months.
On the bottom line, Pilbara Minerals reported a 329% increase in underlying profit after tax to $2,276.3 million. This allowed the company's board to declare a fully franked final dividend of 14 cents per share, which took its FY 2023 dividend to 25 cents per share. This represents a $750 million return to shareholders.
How does this compare to expectations?
According to a note out of Goldman Sachs, its analysts were expecting revenue of $4,261.9 million, EBITDA of $3,540 million, and net profit of $2,414.5 million for FY 2023.
The bad news for the Pilbara Minerals share price today is that this means its result has fallen well short of estimates.
However, one thing that has come in ahead of expectations is its dividend. Goldman had pencilled in a return of 22 cents per share.
Management commentary
Pilbara Minerals' managing director and CEO, Dale Henderson, was delighted with the company's performance. He said:
The FY23 period has been an exceptional year for Pilbara Minerals across all fronts. Strong operational performance within a healthy pricing environment for lithium products has translated to an impressive set of financial outcomes for the business and our shareholders.
This strong financial result has enabled the Board to support a fully franked final dividend of 14 cents per share resulting in a total dividend of 25 cents per share for FY23.
Henderson also revealed that the company has increased its ore estimate Pilgangoora project. This could support production beyond its current 1,000kt per annum plan. He adds:
Today we also announced a 35% increase in Ore Reserves to 214Mt which has enabled us to commence a new study to explore further expansion of production capacity beyond P1000.
This potentially opens the door for additional tonnage to be allocated for downstream and midstream growth opportunities which will be reviewed as part of the strategic partnering process with outcomes now targeting the March Quarter 2024.
Outlook
Looking ahead, management is guiding to FY 2024 spodumene concentrate production of 660kt to 690kt with unit operating costs of $600 to $670 per dry metric tonne (dmt).
This compares to production of 620.1kt and unit operating costs of $613 per dmt in FY 2023.
The company hasn't provided any lithium price estimates, but its CEO has spoken positively about the demand outlook. Henderson said:
The long-term outlook remains very positive for battery grade lithium raw materials with continued adoption of EVs and battery storage and an expected growing deficit as anticipated demand for lithium outstrips expected supply. During the past quarter the industry saw a pullback in pricing from the strong pricing encountered in the first half of the financial year.
Despite this pullback strong margins continued to be realised. Looking forward, we expect continued growth in demand for our product with some ongoing pricing volatility in the shorter term as the supply chain continues to tightly manage inventories and responds to macro-economic conditions.
