IGO shares rise as dividend beats estimates
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More news: IGO shares gained after the miner and explorer's underlying cash generation and higher-than-expected dividend in FY24 impressed analysts.
Shares were up 4.2% to $5.47 by 1:20pm AEST. The share price has dropped nearly 60% over the last 12 months.
Jarden analysts said IGO's underlying cash generation remained strong despite weak commodity prices throughout the year. They also noted that the total dividend of 37 cents per share came in 85% ahead of consensus estimates of 20 cents per share.
What they said: "Noisy going into the result on account of very wide variance at key line items in consensus, further complicated by the flagged and incurred write-downs for the balance of the Western Areas acquisition and exploration portfolio," said Jarden analysts.
"Nevertheless, underlying cash flow remained very robust even despite the weakening lithium and nickel prices," they said. "Whilst the market will now likely await the strategy day flagged for September 12th, 2024, we continue to see deep value in the stock and low capex, low risk means to materially enhance operational performance and therefore margins at Greenbushes."
IGO reports profit slide and halves final dividend
The news: Miner and explorer IGO reported a major slide in profit in the 2024 financial year, as softer metal prices hit the group's bottom line.
The numbers: IGO posted net profit after tax of $3 million, down from $549 million in FY23. That figure was short of average forecasts of $154.8 million according to Visible Alpha data.
The results carried an impairment charge of $172 million against its Forrestania and Cosmos assets, acquired as part of the purchase of Western Areas in June 2022, as well as a further $286 million write-down against IGO's nickel exploration portfolio.
Underlying EBITDA lowered 71% year on year to $581 million while total revenue slipped 18% to $841 million.
IGO declared a final dividend of 26 cents per share, taking total dividends to 37 cents, halving last year's payout.
The context: IGO said group revenue came in lower as its Nova Operation saw a 27% decrease in revenue due to reduced nickel prices and sales volumes. Revenue from its Forrestania operation was also lower due to reduced sales.
The company noted that annual spodumene production from its Greenbushes lithium joint venture achieved full-year guidance, with cash costs at the bottom end of guidance.
What they said: "FY24 has been a year marked by significant change, both for the markets in which we operate and with IGO itself," said IGO managing director and CEO Ivan Vella.
"While this change has provided many challenges, it has also given us the opportunity to prepare our business for its next chapter," he said.
The sources: ASX announcement, Jarden research
