Mineral Resources employees. Source: Mineral Resources/LinkedIn
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  • ASX 200-lister Mineral Resources (MIN) delivers its H1 FY22 report which Managing Director Chris Ellison describes as the “worst first half financial result in three years”
  • The company posted an 80 per cent decrease in underlying EBITDA which it says reflects the collapse in iron ore prices and widening discounts
  • Profit after tax fell 96 per cent on the prior corresponding period to $19.2 million
  • Underlying earnings fell to a $36 million loss
  • Mineral Resources won’t declare an interim dividend but remains positive in its outlook to meet its FY22 spodumene and iron ore export guidance
  • Mineral Resources has signed a deal with Albemarle to increase its interest to 50:50 in the MARBL Lithium Joint Venture
  • Company shares down 3 per cent to $56.14

Mineral Resources (MIN) has reported a sharp decline in earnings for the first half of the 2022 financial year on the back of “volatile conditions” in the iron ore market.

The materials stock reported an 80 per cent decrease in underlying earnings before interest, tax, depreciation, amortisation and impairment (EBITDA) to $156 million compared to the first half 2021.

Mineral Resources said the hefty decline was due to the collapse in iron ore prices and widening discounts.

Further, statutory net profit after tax (NPAT) came to $19.2 million which marks a 96 per cent decrease on the prior corresponding period. The group posted an underlying net loss after tax of $36 million — a 108 per cent drop compared to the first half of FY21.

Revenue fell 12 per cent to $1.35 billion.

As a result of its capital investment program, underlying net loss, and “volatile conditions”
in the iron ore market, the board decided to not declare an interim dividend.

Mineral Resources Managing Director Chris Ellison said it was a challenging period.

“It hasn’t been easy and the challenges during 1H22 were amplified by the collapse in iron ore prices. This has delivered our worst first half financial result in three years,” he said.

“These results do not reflect the substantial progress in our iron ore, lithium and gas businesses during the last six months which will create significant value for decades to come and which underpins our long-term growth for our Mining Services division.”

The multi-billion dollar company remained positive in its outlook, claiming it is on target to meet its FY22 volume guidance of a 15 to 20 per cent increase for Mining Services, spodumene export guidance of between 450,000 and 475,000 tonnes per annum and the revised full-year iron ore export guidance of 18.5 to 19.5 million tonnes per annum.

MARBL Lithium Joint Venture

Alongside its half-year report, the ASX 200-lister announced it has signing a non-binding letter agreement with NYSE-listed Albemarle Corporation to explore a potential expansion of the MARBL Lithium Joint Venture.

The JV was formed in November 2019 to develop the Wodgina lithium mine. Under the new deal, the ownership will change from a 60:40 interest to a 50:50 interest with MIN resuming management of the mine.

Additionally, a new 50:50 JV between the pair is in the works to own more lithium conversion assets outside of Australia to be jointly funded by MRL and Albemarle. Albemarle would be the operator of these assets.

“Through this agreement, we have a clear pathway to become one of the world’s largest downstream lithium producers by supplying significant volumes of lithium hydroxide using high-quality spodumene from our portfolio of tier one hard rock mines in WA,” Mr Ellison said.

Company shares were down 3 per cent to trade at $56.14 at 10:50 am AEDT.

MIN by the numbers
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