Lynas share price takes a hit today amid slumping sales revenue

ASX 200 investors will be running their slide rules over Lynas' quarterly update today.

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The Lynas Rare Earths Ltd (ASX: LYC) share price is down 1.9% today.

Shares in the S&P/ASX 200 Index (ASX: XJO) rare earths miner closed yesterday trading for $6.41. At the time of writing on Friday morning, shares are swapping hands for $6.29 apiece.

For some context, the ASX 200 is down at this same time.

ASX 200 investors will be running their slide rules over Lynas' quarterly update today, covering the three months to 30 September (Q1 FY 2024).

Read on for the highlights.

What did the rare earths miner report?

The Lynas share price is slipping after the ASX 200 miner reported a mixed result for the quarter, after a strong close to FY 2023.

Lynas achieved sales revenue for the three months of $128 million. That's down from $164 million in Q1 FY 2023 and down from $144 million in the last quarter.

Management pointed to "lower rare earths prices and continuing accumulation of neodymium and praseodymium (NdPr) and SEG inventory" for dragging on sales revenue.

Total rare earths oxide (REO) production for the quarter was 3,609 tonnes, up from 3,500 tonnes in Q1 FY 2023. NdPr production also increased year on year to 1,526 tonnes, up from 1,045 tonnes.

NdPr production slipped from the 1,864 tonnes achieved in the last quarter, however. Management said this reflected planned and delayed preventative maintenance works in its Cracking & Leaching plant at Lynas Malaysia.

The average selling price for REO came in at $45.4 per kilogram. That's up from $35.5/kg last quarter but down from $49.3/kg in Q1 FY 2023.

The company continues to work through legal challenges to its operating licence conditions in Malaysia as well as the start-up and commissioning process in Kalgoorlie.

Commenting on the ongoing legal issues in Malaysia, the miner reported it's lodged an application for a stay to allow it to operate on a normal basis while the administrative and legal appeals are worked through. This has been listed for hearing in November.

On the expenditure front, cash payment for CAPEX, exploration and development of $165 million was up from $98 million a year ago and down from $201 million last quarter.

Looking at what could impact the Lynas share price in the months ahead, management noted:

We are excited to have now commenced the kiln heating cycle at the new Kalgoorlie Facility. This is the first step in production and will be followed by first production, and then ramp up over the next few months.

Whilst the trajectory of this ramp up is inherently unpredictable, this is an exciting milestone.

As at 30 September, Lynas had closing cash and short-term deposits of $903 million.

Lynas share price snapshot

The Lynas share price has struggled to gain traction this year, now down 18% in 2023.

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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