IGO’s FY25: $955M Net Loss, 66% Margin at Greenbushes, No Dividend

Challenging Year for IGO

IGO Limited’s FY25 financial results reveal a tough operating environment marked by a substantial net loss of $955 million, a sharp reversal from a modest profit in the prior year. The headline loss was heavily influenced by a $642 million share of net loss in its Tianqi Lithium Energy Australia (TLEA) joint venture, which includes a $605 million impairment of the Kwinana lithium refinery assets. This impairment reflects a reassessment of the refinery’s long-term viability amid subdued lithium market conditions.

Revenue for the year fell to $528 million from $841 million in FY24, driven by lower sales volumes at the Nova nickel operation and the cessation of production at Forrestania in September 2024. Underlying EBITDA swung to a loss of $43 million compared to a $581 million profit the previous year, underscoring the impact of weaker commodity prices and operational challenges.

Greenbushes Remains a Bright Spot

Despite the broader market headwinds, IGO’s Greenbushes lithium operation demonstrated resilience. The asset maintained a robust EBITDA margin of 66%, down from 85% in FY24 but still indicative of strong cash conversion and operational efficiency. Spodumene production increased by 7% year-on-year, and unit production costs slightly improved, positioning Greenbushes well to capitalize on anticipated market recovery. The company is actively pursuing optimisation programs and growth initiatives, including the CGP3 expansion phase.

Strategic Moves and Asset Rationalisation

IGO’s strategic refresh, announced in September 2024, is focused on clean energy materials and value creation through disciplined portfolio management. The company has implemented a new exploration business model aimed at prioritising high-value targets, resulting in $115 million of exploration asset impairments as part of a broader rationalisation effort.

The Forrestania nickel operation was transitioned to care and maintenance following a seismic event and is now being sold to Medallion Metals under terms that include no upfront cash consideration but a royalty on future gold production. This divestment aligns with IGO’s strategy to streamline operations and focus on core assets.

Financial Position and Outlook

IGO ended FY25 with a strong balance sheet, holding $280 million in cash and $300 million in undrawn debt facilities. However, free cash flow was significantly reduced to $49 million from $713 million in FY24, reflecting lower earnings and increased rehabilitation provisions. The company has elected not to pay a final dividend for FY25, signalling a cautious approach to capital management amid ongoing market uncertainty.

Looking ahead, FY26 guidance anticipates steady production at Nova and Greenbushes with continued focus on cost control and operational optimisation. The company also plans to advance exploration, technology development, and strategic partnerships as it seeks to navigate the evolving clean energy materials landscape.

Governance and Leadership Changes

IGO is undergoing a measured board renewal and executive leadership transition, including the resignation of a non-executive director and the appointment of a new Chief People and Sustainability Officer. These changes reflect a broader commitment to strengthening governance and aligning leadership with the company’s strategic priorities.