IGO profit slumps on lower prices and impairments on nickel
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The news: Critical minerals producer IGO has posted a slump in half-year profit on the back of lower earnings from its lithium business and hefty writedowns against its nickel assets.
The numbers: The lithium and nickel miner posted a first-half net profit of $288.3 million, down 53% from a year ago. This included a $172 million write-down in the value of its Cosmos and Forrestania nickel assets, flagged last month.
Revenue fell 19% to $438.2 million and the company will pay an interim dividend of 11 cents a share, down from 14 cents a year ago.
IGO shares were up 2.55% to $7.24 in early trading on the ASX.
The context: IGO last month said group sales dropped 28% in the December quarter in 2023 following an 18% fall in nickel prices, prompting a decision to mothball the under-construction Cosmos nickel mine in WA.
It has also suffered a hit from the slide in lithium prices, which has led it to cut production at the Greenbushes lithium mine in WA — Australia’s biggest lithium mine. The group saw lower earnings from its TLEA joint venture with China’s Tianqi Lithium, which part-owns Greenbushes along with Albemarle.
New chief executive Ivan Vella said he would look to refresh IGO’s strategy over the coming months.
What they said: “Despite the commodity price headwinds we are facing, I am pleased to report on the continued cash generation of our nickel and lithium businesses and the underlying strength of our balance sheet," Vella said.
“Nine weeks into my role at IGO, I am developing a clearer view of what needs to be done for IGO to achieve success into the future,” Vella said.
The source: ASX announcement
