Lynas Rare Earths (LYC) Q2 2025 earnings summary

Executive summary

• Quarterly gross sales revenue rose to A$141.2m in Q2 FY25, the highest since June 2023, driven by higher volumes despite low market prices and subdued demand in China.

• Official opening of the Kalgoorlie Facility and successful commissioning of Mt Weld Expansion Project Stage 1 marked major operational milestones.

• Production was impacted in December due to reaching the annual lanthanide processing limit in Malaysia and technical issues with new feedstock.

• Ongoing permitting issues at Seadrift are being addressed with a newly defined pathway and positive discussions with the DOD.

Financial highlights

• Sales receipts reached A$145.9m in Q2 FY25, up from A$127.5m in Q1 FY25.

• Achieved product mix and favorable currency movements contributed to a higher average selling price, though future quarters may see more non-NdPr sales, potentially lowering average price.

• Capital expenditure for the year is tracking within the AUD 400–500 million guidance, with Kalgoorlie costs still being capitalized.

• Closing cash and short-term deposits declined to A$308.3m from A$414.3m in the previous quarter.

• Cash outflows included A$140.9m for capex, exploration, and development, and A$94.3m for production, admin, and royalties.

Outlook and guidance

• Market conditions for rare earths are expected to remain challenging into March 2025 due to subdued China demand and the extended lunar new year.

• Confident in demonstrating 10,500 tons operable NdPr capacity in FY2025, with initiatives underway to address current production challenges.

• Technical solutions for MREC feedstock impurities are being implemented to prevent future production disruptions.

• Plan to recover lost production from December by running at higher rates through the remainder of the fiscal year.

• Anticipate additional sales of non-NdPr products in the last two quarters of the financial year.