Lynas Rare Earths (LYC) Q4 2024 earnings summary

Executive summary

• First shipment of Mixed Rare Earth Carbonate (MREC) left Kalgoorlie, marking a major milestone after significant construction challenges.

• Quarterly gross sales revenue rose to A$136.6m in Q4 FY24, up from A$101.2m in Q3 FY24, but below A$157.5m in Q4 FY23.

• Internal focus remained on improving efficiencies, reducing costs, and enhancing competitiveness in a tough market.

• Positive operating cash flow maintained despite rare earth prices at five-year lows, with only two firms globally profitable at these levels.

• Production volumes were down but aligned with market demand, with all customer needs met and a slight inventory reduction.

Financial highlights

• Positive operating cash flow reported despite low NdPr prices.

• Sales receipts for Q4 FY24 were A$117.5m, up from A$107.7m in Q3 FY24, but down from A$188.9m in Q4 FY23.

• Free cash flow negative after CapEx, reflecting continued investment in growth projects.

• Inventory of NdPr reduced by 200 tons during the quarter.

• Closing cash and short-term deposits at 30 June 2024 were A$523.8m, down from A$616.7m at 31 March 2024.

Outlook and guidance

• Ramp-up of Kalgoorlie and downstream production at Lynas Malaysia is proceeding as planned, targeting 9,000 tonnes per annum NdPr capacity, with modifications on track for 10,500 tonnes.

• First production of separated Dysprosium and Terbium at Lynas Malaysia expected in CY2025, with commissioning and ramp-up in mid-CY2025.

• Mount Weld expansion proceeding well, with stage one to be fully commissioned in the coming months.

• No detailed production guidance provided; production rates will be flexed according to market conditions.

• Hybrid renewable power station at Mt Weld to deliver up to 70% renewable energy, operational from 2026.