PLS Group (PLS) Q1 2025 TU earnings summary

Executive summary

• Achieved strong operational performance in the September quarter with production of 220,100 dmt and sales of 214,500 dmt, maintaining high lithium recoveries at 75.3% and unit operating costs of $606/dmt FOB.

• Revenue for the quarter was $210 million, down 31% from the previous quarter due to a 19% decline in average realized price and 9% lower sales volume.

• Strategic decision made to optimize operations by pausing production at the higher-cost Ngungaju plant and focusing on the lower-cost Pilgan plant, resulting in the new P850 operating model.

• Acquisition of Latin Resources is progressing, expected to close in early 2025, diversifying the asset base and expanding into new markets.

• Maintained a strong cash balance of $1.4 billion at quarter end, despite weaker pricing and ongoing capex for expansion projects.

Financial highlights

• Unit operating cost (FOB) was $606/dmt, up 3% sequentially; CIF cost was $717/dmt, down 2%.

• Cash margin from operations was $49 million; after capex and mine development, cash flow was negative $2 million.

• Total capex spend was $214 million, with $103 million for growth projects, $55 million for new projects, $44 million for mine development, and $7 million sustaining.

• Cash balance at 30 September was $1.4 billion, down $274 million from the prior quarter, mainly due to capex.

• New A$1 billion revolving credit facility established post-quarter to increase funding access.

Outlook and guidance

• FY25 production guidance revised to 700–740kt under the P850 model, with unit cost (FOB) guidance lowered to $620–640/dmt.

• Capex guidance reduced to $565–610 million; expected ~$200 million cash flow improvement in FY25 from cost optimisation.

• Pilgan plant to be optimised as standalone operation; Ngungaju plant placed in care and maintenance from December 2024.

• All current offtake commitments can be met under revised production profile.

• Higher production volume and lower unit costs anticipated in FY26 as P1000 ramps up.