The Pilbara Minerals Ltd (ASX: PLS) share price is under the spotlight after the ASX lithium mining share announced its FY23 report.
Pilbara share price
FY23 result
Here are some of the highlights from the result for the 12 months to June 2023:
- Sales volume up 68% to 608kt
- Realised price up 87% to US$4.447 per tonne
- Revenue jumped 242% to $4.06 billion
- EBITDA (EBITDA explained) soared 307% to $3.32 billion
- Net profit after tax (NPAT) surged 326% to $2.39 billion
- Operating cashflow jumped 4345 to $3.5 billion
- Final dividend of 14 cents per share
- Total dividend per share of 25 cents
The business is seeing a lot of progress with its projects, the construction of the P680 primary rejection facility is underway. A final investment decision has been taken for the P1000 project and mid-stream demonstration plant, while construction at the POSCO joint venture lithium hydroxide plant is continuing to schedule.
Pilbara Minerals also reported that the Pilgangoora ore reserve was increased by 35% to 214mt, which has enabled a new study to explore further expansion of production capacity after P1000.
Pilbara Minerals dividend
The final dividend, amounting to approximately $420 million for all shareholders, will be paid on 27 September 2023. It will have paid out a total of around $750 million for FY23 between the interim and final dividends.
This payment represents a dividend payout ratio of 30% of free cash flow.
Outlook for the Pilbara Minerals share price
The ASX lithium share has given production guidance of between 660kt to 690kt spodumene concentrate, which would be growth from 620kt in FY23.
Unit operating costs are expected to be between US$390 per dry metric tonne (dmt) to US$436 per dmt.
It’s planning capital expenditure of between $490 million to $540 million on growth including the P680 and P1000 projects, with another $140 million to $160 million on mine development.
The company noted that it still needs to pay $773.3 million of tax during the first half of FY24. But that’s okay because it had a cash balance of $3.3 billion at the end of FY23.
Pilbara Minerals said that the long-term outlook remains “very positive” for battery grade lithium raw materials with continued adoption of electric vehicles and battery storage.
The ASX lithium share pointed to an expected growing deficit of lithium as an anticipated demand for lithium outstrips expected supply. I believe this could ultimately be a long-term boost for the Pilbara Minerals share price and profit.
While the lithium price has dropped back from the very high price seen in the first half of FY23, the company is still achieving “strong margins”.
It’s doing really well, but it’s also valued close to its 2023 high. There may be a better share price to buy at in the next year or so, but things are looking positive for long-term profit growth with all of its projects. Volatility of the lithium price could open up opportunities.
