Pilbara Minerals share price on watch amid 78% half-year profit decline and no dividend

Weak lithium prices have weighed heavily on the company's profits.

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The Pilbara Minerals Ltd (ASX: PLS) share price will be in focus today.

This follows the release of the lithium miner's eagerly anticipated half-year results.

Pilbara Minerals share price on watch

  • Revenue down 65% to $757 million (from $2,180 million)
  • EBITDA down 77% to $415 million (from $1,812 million)
  • Underlying profit after tax down 78% to $273 million (from $1,242 million)
  • No interim dividend for FY 2024
  • Cash balance of $2.1 billion

What happened during the half?

For the six months ended 31 December, Pilbara Minerals reported a sharp drop in both revenue and profits.

The company's revenue was down 65% to $757 million after a 67% reduction in its average realised price offset a 7% lift in sales volumes.

Things were even worse for Pilbara Minerals' earnings, with EBITDA falling 77% to $415 million and its underlying profit after tax dropping 78% to $273 million.

In light of this profit decline, the company's board elected not to pay an interim dividend for FY 2024.

Management commentary

Pilbara Minerals CEO, Dale Henderson, was pleased with the result given the tough trading conditions. He said:

The first half of the financial year represents a strong set of operational outcomes and successful project milestones that continue to advance the Company's growth strategy as an emerging lithium materials leader.

Strong EBITDA margins of 55% were delivered during the period despite the softer pricing environment for lithium. Although pricing has reduced significantly from the prior year record highs, the Company finds itself in a position of strength. Our strong balance sheet positions the business to navigate any period of softer pricing and provides a competitive advantage relative to many peers within the sector.

Commenting on the company's decision not to pay a dividend, the CEO said:

To further reinforce the balance sheet, prudent steps were undertaken to further preserve capital including the decision to withhold any interim dividend payment.

Outlook

Henderson remains positive on the future, noting that the company's low costs leave it well-positioned in the current environment. He said:

With the Company's low unit-cost structure and strong balance sheet, Pilbara Minerals is uniquely placed to better withstand periods of softer pricing whilst continuing to build-out the production base to capitalise on improved pricing conditions.

Management also advised that its FY 2024 capital expenditure guidance is down slightly to $820 million to $875 million.

The Pilbara Minerals share price is down 14% over the last 12 months.

Motley Fool contributor James Mickleboro 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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