Lynas reports 70% profit drop, flags 'stubbornly low' prices
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The news: Lynas Rare Earths reported a slide in full-year profit and earnings as the rare earths producer flagged subdued demand from China and "stubbornly low" rare earths market prices.
The numbers: Lynas posted net profit after tax of $84.5 million, down 72.8% from FY23. Revenue fell 37.3% to $463.3 million while EBITDA dropped 65% to $132.1 million.
Production of neodymium and praseodymium (NdPr) — two of its core products — lowered 8% year on year due to a six-week major works program at its Malaysia plant.
Meanwhile, the average China domestic price of NdPr tumbled 27% from USD60.4 ($88.95) per kilogram in June 2023 to USD44 ($64.80) per kilogram to June 2024.
The context: Lynas said that its average selling price improved towards the end of the financial year as it managed the timing of sales, especially for heavy rare earths "where the pricing was particularly volatile".
It noted that future market price trends of NdPr continue to depend on end product demand, particularly in the automotive industry. Meanwhile, prices for lanthanum (La) and cerium (Ce) remain "very low", with the marginal cost of producing the materials exceeding the potential achieved prices.
Production and sales of La and Ce were reduced during FY24 to optimise cost performance, the company said.
What they said: "Lynas has over a decade of experience as a supplier of separated rare earths and this means we are well prepared to weather market price volatility," said Lynas CEO and managing director Amanda Lacaze.
"Despite the short term effects of low market prices, we continue to see investment and policy initiatives that will support a growing global rare earths supply chain," she said.
The source: ASX announcement
