The Mineral Resources Ltd (ASX: MIN) share price is taking a tumble today.
Shares in the S&P/ASX 200 Index (ASX: XJO) lithium stock and diversified resources producer closed yesterday trading for $44.18. In morning trade on Thursday, shares are swapping hands for $40.1 apiece, down 9.23%.
For some context, the ASX 200 is down 0.5% at this same time.
This underperformance comes following the release of Mineral Resource's financial results for the full year ended 30 June (FY 2024).
Here are the highlights.
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Mineral Resources share price plunges on diving earnings
- Revenue of $5.28 billion, up 10% from FY 2023
- Underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) of $1.06 billion, down 40% year on year
- Underlying net profit after tax (NPAT) of $158 million, down 79% from FY 2023
- No final dividend declared; fully franked interim dividend of 20 cents per share is the total full year dividend, down 89.5% from FY 2023
What else happened with the ASX 200 mining stock during the year?
The big year-on-year decline in profit and suspension of the final dividend are obvious weighers on the Mineral Resources share price today.
But revenue of almost $5.3 billion was up 10% from the prior year. And so was operating cash flow before financing and tax, which came in at $1.91 billion, up 9% from FY 2023, including iron ore customer prepayments of $600 million.
The company's Mining Services segment was a standout performer. Production volumes were up 9% year on year to 269 million wet metric tonnes (wmt). Mining Services achieved a record full-year underlying EBITDA of $550 million, up 14% from the prior year.
In its Iron Ore business, Onslow Iron delivered the first ore on ship in May 2024. Mining continued to ramp up at the project, and construction of the dedicated haul road is expected to be complete in October.
Mineral Resources' Lithium business, as you'd expect, was a big drag on the ASX 200 miner's overall performance. MinRes reported achieving an average price of US$1,279 per dry metric tonne (dmt) SC6, down 76% year on year.
In the Energy segment, the company noted its Lockyer-5 Sidetrack-1 development well achieved the highest stabilised flow rate in the Perth Basin of 104 million standard cubic feet (MMscf) per day.
There was a total of $3.36 billion of capital expenditure during the year, most of which was splashed out for Onslow Iron. This saw net debt increase by 134% from FY 2023 to $4.43 billion. As at 30 June, Mineral Resources had available liquidity of $2.83 billion, up 55% year on year.
What did management say?
Commenting on the results pressuring the Mineral Resources share price today, managing director Chris Ellison said, "This was the biggest year of development in our history, culminating with the start-up of the transformational Onslow Iron project."
Ellison added:
Onslow Iron will generate strong returns through commodity cycles and underpin significant growth in our services and infrastructure earnings. The value of Onslow Iron has already been demonstrated by the sale of a minority share of the dedicated haul road to Morgan Stanley Infrastructure Partners for $1.3 billion.
The sale of the haul road stake further strengthens the MinRes balance sheet and demonstrates the Company's unique ability to recycle capital. We expect to de-leverage rapidly as Onslow Iron hits nameplate capacity and becomes cashflow positive over the next 12 months…
Given the stubborn lithium price and our remaining investment in Onslow Iron, we will continue to take a conservative approach during FY 2025, deferring expansion projects and focusing on cost reduction and cash preservation.
What's next for the ASX 200 miner?
Looking at what might impact the Mineral Resources share price in the year ahead, the company highlighted the particularly positive outlook for its outperforming Mining Services segment.
The miner aims to ramp up nameplate production at Onslow Iron to 35 million tonnes per year, commencing in June 2025.
"As Onslow Iron volumes increase, group cash flow is expected to increase significantly, facilitating a rapid deleveraging of the balance sheet from early 2025," management said.
Mineral Resources share price snapshot
With today's intraday fall factored in, the Mineral Resources share price is down 43% in 12 months.
