Pilbara Minerals Reports $71M EBITDA and $68M Statutory Loss in H1 FY25
Pilbara Minerals delivers record production and sales at Pilgangoora but faces statutory net losses due to joint venture investments and expansion costs. The company remains optimistic about long-term lithium market prospects.
- Record production and sales volumes at Pilgangoora Operation
- Underlying EBITDA estimated between $71M and $75M
- Statutory net loss expected between $68M and $71M due to joint venture and project costs
- P680 expansion completed on time and budget; P1000 project construction finished post-period
- Strong cash position of $1.2 billion supports ongoing growth and investment
Operational Excellence Drives Underlying Earnings
Pilbara Minerals Limited (ASX: PLS) has reported a robust operational performance for the half year ended 31 December 2024, highlighted by record production and sales volumes from its flagship Pilgangoora Operation. The company’s underlying EBITDA is estimated between $71 million and $75 million, reflecting the benefits of the P850 Operating Model’s cost efficiencies and the successful completion of the P680 expansion project on schedule and within budget.
These operational achievements underpin a relatively modest underlying net loss after tax, forecasted between $5 million and $7 million, signaling resilience in the core lithium mining business despite challenging market conditions.
Statutory Losses Reflect Strategic Investments and Market Pressures
However, Pilbara Minerals’ statutory results tell a more complex story. The company anticipates a statutory net loss ranging from $68 million to $71 million, primarily driven by non-cash impairments and losses related to its growth platforms. Notably, a $16 million reduction in the carrying value of its call option to increase its stake in the POSCO Pilbara Lithium Solution Co. Ltd (PPLS) joint venture, alongside a $22 million share of net loss from the PPLS JV, weigh heavily on the bottom line.
Additionally, the Mid-Stream Demonstration Plant Project incurred approximately $24 million in construction costs during the period, reflecting ongoing investment in Pilbara Minerals’ chemicals strategy aimed at expanding its footprint in value-added battery materials.
Progress on Expansion and Chemicals Strategy
Post-period, the company marked a significant milestone with the completion of the P1000 project and the achievement of first ore on 31 January 2025, positioning Pilbara Minerals for future production growth. Meanwhile, the PPLS JV continues its ramp-up phase, with Train 1 achieving first product certification in November 2024 and Train 2 commencing ramp-up, targeting certification in the second half of FY25.
The Demonstration Plant Project, temporarily paused in late 2024 due to lithium market conditions, received a $15 million grant from the Western Australian Government, prompting discussions to resume construction. If recommenced, the project is expected to complete by December 2025, with costs fully offset by government funding.
Financial Strength Supports Strategic Growth
Despite the statutory losses, Pilbara Minerals maintains a strong balance sheet with a cash position of approximately $1.2 billion as of 31 December 2024. This financial strength provides the company with flexibility to continue incremental investments aligned with market dynamics and its long-term lithium market outlook.
CEO Dale Henderson emphasised the company’s confidence in its strategic direction, highlighting the balance between operational excellence at Pilgangoora and the staged investment approach in chemicals and downstream processing ventures.
Bottom Line?
Pilbara Minerals’ strong operational base cushions near-term losses, setting the stage for strategic growth amid lithium market volatility.
Questions in the middle?
- How will lithium market price fluctuations impact the ramp-up and profitability of the PPLS JV in H2 FY25?
- What are the potential timelines and funding requirements for scaling the Demonstration Plant Project beyond 2025?
- How might ongoing expansion projects at Pilgangoora influence production costs and margins in the medium term?
