Liontown Ltd (ASX: LTR) shares are under pressure on Thursday morning.
At the time of writing, the lithium miner's shares are down 2.5% to $1.59.
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Why are Liontown shares falling?
Investors have been selling Liontown shares this morning following the release of its half-year results.
According to the release, the company delivered strong growth in production and revenue during the half as the Kathleen Valley lithium project ramps up underground operations.
For the six months ended 31 December, Liontown produced 192,514 dry metric tonnes (dmt) of spodumene concentrate at a grade of 5.0% Li₂O. This represents a 70% increase on the prior corresponding period.
Sales volumes also surged, rising 106% to 189,596 dmt as the Kathleen Valley operation increased output.
Liontown's average realised price for the period was US$888 per dmt for SC6 concentrate. This is up from US$811 per dmt a year earlier. This helped drive revenue of $207.5 million for the half year, more than double the $100.4 million recorded in the prior corresponding period.
The good news is that its realised price is likely to rise further in the coming quarter. Liontown highlighted that its inaugural Metalshub spot auction in November 2025 cleared at US$1,254 per dmt SC6 for shipment in January 2026.
Ramp-up weighs on earnings
Despite the strong growth in production and revenue, Liontown reported an underlying EBITDA loss of $7.7 million as the project continues to ramp up production.
The company also posted a statutory net loss after tax of $184 million. However, this includes $104.4 million of non-cash charges relating to the LGES convertible note derivative.
Management advised that this accounting charge was largely driven by the company's share price appreciation during the period and will not recur following the conversion of the LGES notes to equity in February 2026.
Operational costs also declined through the half, with unit operating costs of $985 per dmt and all-in sustaining costs of $1,179 per dmt.
Outlook
Liontown's managing director and CEO, Tony Ottaviano, was pleased with the half and is positive on its outlook. He said:
Kathleen Valley is now a 100% underground operation. We have delivered a one million tonne per annum underground run-rate on schedule, sold 190,000 tonnes of concentrate across ten shipments, and more than doubled revenue period to period. The underground ramp-up is on track and we expect the second half to be materially stronger as volumes, recoveries, and pricing all continue to improve.
The company's FY 2026 guidance remains unchanged and cash generation is expected to improve through the second half as production continues to ramp up.
The company also confirmed that work is underway on a refresh of its planned 4 million tonne per annum expansion at the Kathleen Valley lithium operation.
