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Highlights:
- Lynas has shared its quarterly report for the period ended 30 June 2022.
- The company has posted a considerable quarterly sales revenue of AU$294.5 million in the given period.
- Lynas’ sales receipts stand at AU$351 million.
- The company stated that the demand for Lynas’ products, that are mainly sold in outside China markets, stayed robust during this quarter.
- However, the quarterly production was affected by the water supply shortage in Malaysia, informed Lynas.
The shares of Lynas Rare Earths Limited (ASX:LYC) are quite volatile on the ASX today (18 July 2022). During the early hours of trading, the share price jumped to AU$8.27 apiece (at 10:20 AM AEST), and at 11:48 AM AEST, the shares dropped 2.85% to AU$7.83 apiece.
The benchmark index, ASX 200 Materials (INDEXASX:XMJ) was 0.91% up to 14,453.40 around the same time.
Key highlights of the quarterly results
- The company has achieved record sales receipts of AU$351 million during the quarter against AU$327.7 million in the third quarter.
- Quarterly sales revenue of AU$294.5 million, slightly lower than AU$327.7 million of the third quarter of FY22. Lynas said the sales revenue was affected due to lower production caused by a water shortage in Malaysia.
- The company ended the year with a cash balance of AU$965.6 million.
- During the quarter, the company recorded total REO production of 3,650 REOt, which fell from 4,945 tonnes in 3QFY22.
- During the stated period, NdPr prices were around 70% to 80% higher as compared to the last year.
- The quarter reported strong demand for Lynas’ products outside the Chinese market.
What happened during the given period (4QFY22)?
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Image source: © Charlieaja | Megapixl.com
Lynas secured a follow-on contract with the United States DoD (Department of Defence) of circa US$120 million to construct a commercial Heavy Rare Earths separation facility.
Lynas proudly reported that its Mt weld operation attained the milestone of one-year LTI free (27 April 2022).
During the period, progress was reported in the growth projects. Lynas said welding has commenced at all five kiln sections at the Kalgoorlie Processing Facility.
The company has implemented multiple strategies to handle the water supply issue, such as using natural local water sources and additional process water storage on the site. Moreover, Lynas’ team has designed a process modification to decrease fresh-water consumption at the Lynas Malaysia site by 40%. This modification is expected to be implemented by the next quarter.
In a year, several cost categories have surged across the industry. According to the ASX announcement, the royalty, freight, and chemical input costs have increased significantly. Some specific chemicals reported a surge of up to 70%. In line with these trends, the company has redoubled its focus on opportunities to enhance efficiency and recognise uncertain external conditions.
Past performance of Lynas shares
Including today’s fall, the share price of Lynas dropped by approximately 5% in the last month. In six months, the share price dipped by 28% and the year-to-date fall was 27%. In the past 12 months, the share price surged by 35%.
