Lynas profit down 74pc

Shares in Lynas Rare Earths were slightly up on Monday, despite news the company's net profit after tax for the first half of the 2024 financial year was down 74 per cent.

As of 9.38am AWST, Lynas was trading at $6.13 per share, up 5 per cent.

The Amanda Lacaze-led company generated a first half NPAT of $39.5 million, down from $150.1 million during the prior corresponding period. Its earnings before interest, tax, depreciation and amortisation also fell, to $62.6 million, from $189 million during the first half of the 2023 financial year.

Additionally, Lynas's revenue was down from $370 million during the first half of 2023 to $234.8 million, while its cash balance up until December 31 2023 totalled $686.1 million, on the back of putting $347 million towards capital projects, predominantly towards its interests in the Goldfields. 

Shareholders were forewarned on January 22 regarding the company's challenging start to the 2024 financial year, after Lynas announced its December quarterly revenue and production had both retreated, citing a temporary shutdown at its Malaysian processing plant and a sustained period of low rare earths pricing. 

"Rare earth market prices continued to be subdued due to low demand in China, especially in the appliance sector, which is affected by the construction downturn," the company said.

"China’s economic recovery is seen as the main factor which could possibly trigger a change in price trend."

Ms Lacaze said Lynas was going through a transitional period during the 2024 financial year, but it would provide a solid foundation for the company.

“The rare earth market is important to many industries and we continue to see strong customer demand for Lynas’s products," she said.

"Lynas has a proven track record of managing costs and operations to ensure that we can be successful in all market conditions, and across all stages of the market cycle.

"Optimising our industrial footprint through operating efficiencies and capital growth projects will ensure Lynas is well positioned to benefit from forecast market growth and any improvement in market pricing conditions."

The Perth-based company is optimistic its Mt Weld expansion project, 35 kilometres south-west of Laverton, will be productive in coming years, with results from the recent exploration program to be incorporated within an updated resource model later this year.