ASX lithium share IGO Ltd (ASX: IGO) is slipping today.
IGO shares closed Friday at $5.31. In morning trade on Monday, they are swapping hands for $5.23 apiece, down 1.5%.
For some context, the All Ordinaries Index (ASX: XAO) is up by 0.1% at this same time.
This underperformance comes following the release of IGO's quarterly activities update (Q1 FY 2025).
Here are the highlights.
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ASX lithium share dips on eroding revenue
Investors are bidding down the ASX lithium share after IGO reported sales revenue of $143.1 million for the three months, down 39% quarter on quarter.
Revenue was impacted by lower sales volumes at IGO's Nova and Forrestania projects. That came after concentrate from Kambalda was redirected to Esperance Port where it's been stockpiled for export next quarter.
Earnings took a hit over the quarter as well, with underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) coming in at a loss of $2.9 million. That's down from $76.8 million in Q4 FY 2024.
IGO said the earnings plunge was driven by the reduction in its share of net profit from Tianqi Lithium Energy Australia (TLEA) to $37.1 million, down from $67.7 million the prior quarter, as well as lower nickel sales.
The profit decline from TLEA was mainly due to lower spodumene sales and realised prices from IGO's Greenbushes project. TLEA is a joint venture between IGO (49%) and Tianqi Lithium Corporation (51%).
Cash inflows from operating activities over the quarter decreased to $3.1 million from $204.7 million the prior quarter. Cash inflows were hit with the ASX lithium share not receiving any dividends from TLEA over the quarter. In Q4 FY 2024, IGO received $159.3 million in those dividends.
IGO did pay its shareholders the final FY 2024 fully franked dividend of 26 cents per share, totalling $196.9 million over the quarter.
As of 30 September, IGO had cash on hand of $258.7 million, down from $468.0 million on 30 June. The ASX lithium stock had an additional $720.0 million of undrawn debt available.
What did management say?
Commenting on the results that have yet to lift the ASX lithium share today, IGO CEO Ivan Vella said, "Our financial performance for the quarter was impacted by several factors, most notably the lower lithium prices flowing through for Greenbushes, and the lower production due to grades and mine sequence at Nova."
Vella added:
However, operational performance at Greenbushes has been strong with an uplift in quarter on quarter production.
The final preparations for the shutdown at the Kwinana refinery were also completed throughout the quarter. We expect this shutdown to be completed by the end of October, with a fuller sense of the performance improvement visible through the back end of 2Q25.
Following the conclusion of mining in September, we have recently transitioned Forrestania into care and maintenance as planned, after more than 20 years of successful operations.
How has the ASX lithium share been tracking
As with almost every miner in the lithium sector, it's been a tough year for investors in this ASX lithium share. With today's intraday dip factored in, the IGO share price is down 46% over 12 months.
