Diversified mining giant Mineral Resources (ASX:MIN) is having a rough trot, with its share price sinking more than 11% in early trading following the release of its full-year financials.
Late on Wednesday, the company reported a 79% drop in underlying post-tax profit for the year ending 30 June, making just $158 million compared to $769 million the year before.
The slump comes even as overall revenue grew 10% to just under $5.3 billion.
Based in Perth, the multi-billion-dollar miner has operations spanning iron ore, lithium, energy, and mining services, but has been labouring under falling commodity prices.
While shipments from Mineral Resources’ three lithium assets totalled 486,000 tonnes, compared to 293,000 the year before, the company was only able to fetch US$1,279 ($1,885) per tonne rather than the US$5,267 figure it had enjoyed in 2023.
Its mining services division, which is less affected by commodity price jolts, delivered record underlying earnings of $550 million, an increase of 14%.
“Given the stubborn lithium price and our remaining investment in Onslow Iron, we will continue to take a conservative approach during FY25, deferring expansion projects and focusing on cost reduction and cash preservation,” Managing Director Chris Ellison says.
“This approach was reflected by the board’s decision to not declare a final dividend for FY24.”
It’s the first time in more than a decade that the company will not pay a dividend. Last year, shareholders received a payout of $0.70 per share.
“We’re throwing everything off the deck just to make sure we conserve cash,” Ellison told a webcast this morning.
“It’s not a fun time. I mean this is the shittiest time to be the MD of a company.”
Still, Mineral Resources is expecting “significant growth” in cash flow over the next year as its Onslow Iron Ore Project ramps up to its full production capacity from June 2025. That value, the company added, has already been demonstrated through the sale of a minority interest in the dedicated haul road for $1.3 billion to Morgan Stanley Infrastructure Partners.
“The sale of the haul road stake further strengthens the MinRes balance sheet and demonstrates the company’s unique ability to recycle capital,” Ellison says.
“We expect to de-leverage rapidly as Onslow Iron hits nameplate capacity and becomes cashflow positive over the next 12 months.”
Onslow currently has a production capacity of 35 million tonnes per year, but could be expanded to 50 million tonnes.
Shares in Mineral Resources were down 11.39% to $39.15 as of 10:00am EST.
Write to Oliver Gray at Mining.com.au
Images: Mineral Resources
