Lynas Rare Earths (LYC) H1 2025 earnings summary

Executive summary

• NdPr production increased 22% year-over-year to 2,969 tons, with sales volume up 23% and sales revenue rising 8%, despite lower rare earth prices and higher costs.

• Net profit after tax for 1H FY25 was $5.9m, down 85% year-over-year, reflecting margin compression from higher costs and weaker prices.

• Major milestones included commissioning Stage 1 of the Mt Weld Expansion, ramping up the Kalgoorlie Facility, and progress on the Dy/Tb separation circuit in Malaysia.

• 2024 Mt Weld Mineral Resource and Ore Reserve Update confirmed a 92% increase in resources and 63% increase in reserves, supporting a 20+ year mine life at expanded rates.

• Continued focus on safety, community engagement, and sustainability initiatives.

Financial highlights

• Revenue rose 8% year-over-year to $254.3m, with gross profit at $49.0m and EBITDA at $38.1m, both down due to higher costs and inventory write-downs.

• Net profit after tax was $5.9m, and net operating cash inflow improved to $49.5m.

• Capital expenditure totaled $267.0m, with cash and short-term deposits at $308.3m at period end.

• Cost of sales increased by 29% to $205.3m, mainly due to higher sales volume and a $5m inventory provision.

• No dividends were paid or proposed.

Outlook and guidance

• Targeting demonstration of 10,500 tpa NdPr production run rate by end of FY2025, with about one-third from Kalgoorlie feedstock.

• Commissioning and ramp-up of the new Dy/Tb separation circuit in Malaysia expected mid-CY2025.

• Management remains cautiously optimistic on market recovery, focusing on capacity, efficiency, and sustainability.

• Will run at full capacity if market prices are favorable; otherwise, production may be dialed back.

• Mt Weld Expansion Stage 2 construction to complete by end FY25, with progressive commissioning.