The IGO Ltd (ASX: IGO) share price is off to the races today.
Shares in the S&P/ASX 200 Index (ASX: XJO) lithium, nickel and copper miner closed yesterday trading for $13.20. In early trade on Thursday, shares rocketed to $13.95 apiece before retreating to $13.77 at the time of writing, up 4.32%.
For some context, the ASX 200 is down 0.1% at this same time.
This comes following the release of IGO's full-year financial results for the 12 months ending 30 June (FY23).
Read on for the highlights.
IGO share price soars on record results
- Revenue of $1.02 billion, up 13% from FY22
- Net profit after tax (NPAT) of $549 million, up 66% year on year
- Underlying NPAT up 278% from FY22 to $1.53 billion
- Record underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) of $1.99 billion, up 177% year on year
- Final fully franked dividend of 44 cents per share plus a special dividend of 16 cents per share for a full-year payout of 74 cents per share, up 640% from FY22
What else happened during the year?
ASX 200 investors are bidding up the IGO share price today on the back of numerous record financial metrics.
The miner attributed its record FY23 earnings to the "outstanding contribution" from its investment in the lithium joint venture, Tianqi Lithium Energy Australian Limited (TLEA).
Among other strong results, net cash inflow from operating activities reached $1.42 billion, up 299% from $357 million in FY22. And underlying free cash flow leapt 252% year on year to $1.10 billion.
The ASX 200 miner ended the financial year with a strong balance sheet, reporting $775 million in cash at 30 June, up 111% year on year. Net debt stood at $415 million.
The all-time high FY23 dividend payout of 74 cents per share works out to $560 million returned to shareholders. At the current IGO share price, that equates to a fully franked yield (part trailing, part yet to be paid) of 5.4%.
IGO noted it was saddened to announce the sudden passing of CEO Peter Bradford in October 2022. Ivan Vella will commence as the new CEO in December this year.
What did management say?
Commenting on the results sending the IGO share price flying higher today, acting CEO Matt Dusci said:
The delivery of record financial performance during FY23 has clearly demonstrated the transformation of IGO and our success in pursuing a strategy of being aligned to clean energy metals. In FY23, we have generated the strongest set of financial results in IGO's 21-year history, with record revenue, EBITDA and net profit…
Within our lithium business, excellent production and cost performance at the Greenbushes Lithium Mine, combined with exceptional realised pricing, drove record earnings and cash dividends of over $1 billion to IGO, via our lithium joint venture…
Our nickel business also delivered with our operating assets, Nova and Forrestania, generating aggregate free cash flow of $587M for the year at an EBITDA margin of 56%.
Commenting on the sizeable impairment charge against the company's recently acquired Cosmos and Forrestania assets, the result of higher capital and operating costs, challenges to the mine production schedule and delays in development at Cosmos, Dusci added:
Within today's result, we have recorded a $968 million non-cash impairment against the assets acquired from Western Areas. This impairment is disappointing, however IGO remains committed to optimising value from the Western Areas assets as we work to grow our nickel business.
What's next for the ASX 200 mining stock?
Looking at what might impact the IGO share price in the year ahead, management noted that performance at its Kwinana Lithium Hydroxide Refinery was expected to improve over FY24 "as progressive rectifications are made to improve operational performance".
A review at Cosmos commenced in recent months, with the outcomes expected during the December 2023 quarter.
With an eye on FY24, Dusci said:
We are clear on what we need to do to continue to create shareholder value in FY24, including the execution of the continued expansion at Greenbushes, the ramp-up of lithium hydroxide production from Train 1 at Kwinana and demonstrating value at the Cosmos Project.
This will be coupled with safe and reliable delivery of production and costs within guidance at Greenbushes, Nova and Forrestania.
IGO provided detailed FY24 production and cost guidance in its quarterly results.
IGO share price snapshot
The IGO share price is up 2.5% over the past 12 months, not including the ASX 200 miner's dividend payments.
