The Pilbara Minerals Ltd (ASX: PLS) share price is falling on Monday morning.
At the time of writing, the lithium miner's shares are down almost 2% to $2.19.
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Why is the Pilbara Minerals share price falling?
Investors have been hitting the sell button this morning after the lithium giant released a business and earnings update.
In respect to the latter, Pilbara Minerals revealed that for the underlying Pilgangoora operation, it expects to report group underlying earnings before interest, tax depreciation, and amortisation (EBITDA) of $71 million to $75 million for the first half.
This is down from $415 million during the prior corresponding period in FY 2024 and $1,812 million from the first half of FY 2023.
On the bottom line, the company expects to record an underlying net loss of $5 million to $7 million for the half. This is down from a profit of $273 million a year ago.
This result reflects significantly weaker lithium prices, which were partially offset by record production and sales volumes from the core Pilgangoora Operation and cost reductions from the P850 Operating Model.
On a statutory basis, which includes losses from the POSCO joint venture, the company expects to report EBITDA of $45 million to $49 million and a statutory net loss of $68 million to $71 million.
Nevertheless, the company still has a very strong balance sheet. It ended the period with a cash balance of $1.2 billion.
Business update
Management advised that the POSCO joint venture's hydroxide facility ramp-up continues to reach key milestones on schedule.
Train 1 is ramping up in line with expectations and achieved first product certification in November 2024, allowing the sale of certified battery grade Lithium Hydroxide Monohydrate (LHM).
The Train 2 ramp up has commenced, and the joint venture is targeting the start of certification in the second half of FY 2025. The profit or loss impact to the company's joint venture investment in the second half will be dependent on ramp up progress, sales performance, and market prices.
Pilbara Minerals' CEO, Dale Henderson, was pleased with the half. He said:
PLS delivered a strong set of operating outcomes for the first half. This included achieving a new record for total production and sales from the Pilgangoora Operation along with delivering the P680 project on time and on-budget. The underlying EBITDA and net result after tax reflect these achievements.
The company's leader also spoke about its joint venture and the recently pausedMidstream Demonstration Plant, adding:
Beyond our core business, we advanced our chemicals strategy to increase our exposure to value added battery chemicals while further diversifying our supply chain. During the period, the PPLS JV and Midstream Demonstration Plant project progressed through their ramp-up and development phases respectively. These projects continue to reflect the effects of current lower market pricing, development costs or ramp up costs as shown in the expected results.
We remain very positive about the long-term potential of these strategic investments and both projects offer a staged investment pathway for future scale-up at PLS' discretion. We continue to be excited about the long-term outlook for the lithium market and will grow the business in step with market dynamics. This consistent strategy of incremental investment, aligned with market conditions, is underpinned by the strong operating foundation at our Pilgangoora Operation and a solid balance sheet with $1.2 billion of cash as at December 2024.
The Pilbara Minerals share price is down almost 40% over the past 12 months.
