Clean and renewable energy exploration and production group IGO [ASX:IGO] has revealed its latest endeavours, providing inroads for clean and reliable energy through critical and clean energy methods and products: its nickel and lithium businesses.
The minerals producer said its underlying EBITDA (earnings before interest, tax, depreciation, and amortisation) and NPAT (net profit after tax) were both pushed up 22% in the quarter.
IGO was inching up 1.5% early afternoon Friday, its share price sitting at $13.68 apiece.
IGO has risen 14% in the last month, but it hasn’t gained too much in the year so far, while pure-play Core Lithium [ASX:CXO] rocketed in a recent lithium-price rally:
Source: TradingView
IGO’s nickel production ramps up even as lithium slides
The clean renewable energy producer shared a sound result for its sales, as told in the group’s quarterly results report for the three-month period ending 31 March 2023.
IGO has been focused on exploring clean and sustainable methods and products to further the cause for global net-zero carbon emissions, and the most sustainable ways of doing so.
The proof was in the results, with IGO posting quarterly highlights that included an underlying EBITDA of $533 million, an increase of 22% quarter-on-quarter.
NPAT also climbed 22% higher, bringing in a total of $412 million in net profits.
This was achieved off the back of a 16% increase in nickel production, even though there was also a 6% decrease in lithium spodumene concentrate production over the same period.
Group nickel production in the quarter reached a total of 8,358 tonnes (7,179 in 2Q 2023) while spodumene concentrate turned out 356,000 tonnes (379,000 in 2Q 2023).
IGO’s sales revenue was down 7% quarter-on-quarter, having delivered $235.7 million in the latest quarter, whereas in the second quarter the group processed $253.1 million.
The group explained this was mostly due to lower sales volumes at Forrestania, which was, in turn, a result of low-trucking availability.
Nevertheless, group underlying free cash flow totalled $284 million, up 21% on the last quarter, following a quarterly dividend from TLEA.
IGO said it has experienced consistent operations at Greenbushes over the quarter, coupled with steady increase in lithium hydroxide production at Kwinana.
Project activities are advancing at Cosmos, including the completion of the first stage of shaft, paste plant, and aerodrome features, with the first IGO flight having been scheduled this month.
The group’s Nova operation is also making a strong recovery after its fire incident in December.
IGO reduced its net debt to $9 million following strong cash generation, which enabled a $240 million repayment of the revolving credit facility.
The group also paid a record $106 million dividend to its shareholders.
Acting Chief Executive Officer Matt Dusci commented:
‘It has been another strong quarter demonstrating the financial strength of the company. Our results include EBITDA of $533 million and net profit after tax of $412 million, both of which are quarterly records for IGO, as well as significant progress on various growth projects across the business.
‘Production from Greenbushes was marginally lower quarter on quarter, however strong lithium prices drove record revenue and EBITDA, with EBITDA margins exceeding 90%. Higher costs, as previously guided, reflect lower production and the impact of some inflationary pressures.’
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