Rare earth metals producer Lynas' net profit falls in FY23 amid declining rare earth prices

(Kitco News) - Rare earth producer Lynas (ASX: LYC) (OTC: LYSDY) today announced "strong" operational performance for the full year ending 30 June 2023 (FY23) with total REO production of 16,780t (FY22: 15,970t) and NdPr production of 6,142t (FY22: 5,880t).

The company said that Mt Weld delivered record concentrate production in FY23 - sufficient to feed the Lynas Malaysia plant and build inventory for the new Kalgoorlie rare earths processing facility, which is preparing for first production.

Lynas added that its Malaysia plant delivered record NdPr production in Q3 and Q4 of FY23, while early FY23 production was limited by significant water supply issues.

The company also reported FY23 revenue of $739.3 million (FY22: $920 million), EBITDA of $377.7 million (FY22: $601.2 million), and net profit after tax of $310.7 million (FY22: $540.8 million), as average selling price per kg REO declined from $60.3/kg in FY22 to $46.2/kg in FY23.

Commenting on the results, CEO and Managing Director Amanda Lacaze said, “FY23 was another very productive year for Lynas. Operational performance was particularly strong with record concentrate production and record NdPr production achieved in the 2nd half.

“Revenue of $739.3 million remained strong. EBITDA, at $377.7 million was 51% of revenue with NPAT at 42% of revenue. Whilst strong, these results were lower than those in FY22 when market prices were at record highs.”

“Over the past 2 years, we have embarked on an ambitious expansion programme including the construction of the new Kalgoorlie rare earths processing facility, the construction of new facilities in Kuantan to receive mixed rare earth carbonate feedstock from Kalgoorlie and a major upgrade to Mt Weld including exploration and capacity expansion projects,” she added.

Ms Lacaze also pointed out that Lynas remains “confident” that the rare earths market will continue to grow in value and demand, adding that the company’s “extensive” capital investment programme will support capacity growth to meet that demand.

Lynas Rare Earths is the world's only significant producer of separated rare earth materials outside of China. The company's Mt Weld mine in Western Australia is acknowledged as one of the world's premier rare earths deposits.

Lynas also operates the world's largest single rare earths processing plant in Malaysia where it produces high-quality separated rare earth materials for export to manufacturing markets in Asia, Europe and the United States.

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For Kitco News