Record setting quarterly results for Lynas puts it in focus today.
The post Here’s why the Lynas (ASX:LYC) share price is on watch today appeared first on The Motley Fool Australia. –
The Lynas Rare Earths Ltd (ASX: LYC) share price will be in investor’s sights today.
This comes after the rare earths producer released its June quarterly report. At the time of writing, the Lynas share price is sitting at $6.43.
Why is the Lynas share price in focus?
The Lynas Rare Earths share price could be one to watch today following the company’s release of its quarterly activities report.
According to the release, both sales revenue and receipts were record setters for Lynas. During the quarter the company recorded $185.9 million in sales revenue and $192 million in sales receipts. For comparison, Lynas reported $38 million in sales revenue in the 2020 June quarter.
The uptick in revenue and receipts came from increased production of rare earth oxides (REO) of 46.5% on the prior corresponding period to 3,778 tonnes. Meanwhile, neodymium and praseodymium (NdPr) production came in at 1,393 tonnes – representing a 79.7% increase on the prior corresponding period. These high rates of growth will likely draw attention to the Lynas share price today.
Also aiding the company’s increased sales was a higher average selling price for the rare earths. The average price per kilogram almost doubled over the year, from $20.20 per kilo in Q4 FY20 to $39.10 per kilo in Q4 FY21.
Furthermore, Lynas’ cash balance closed at $680.8 million for the quarter – an increase of 19.7% on its balance at the end of the previous quarter.
During the quarter the company progressed its Lynas 2025 projects. These include its rare earths processing facility in Kalgoorlie and the proposed integrated United States processing facility. Currently, the US Department of Defense is reviewing detailed work submissions.
In addition to this, preparation for the next mining campaign at its Mt Weld site is underway.
Last week the company also received a $14.8 million grant from the Australian government’s Modern Manufacturing Initiative.
A look at share price performance
The Lynas Rare Earths share price has been one of the best in the S&P/ASX 200 Index (ASX: XJO) over the past year. Any shareholder that has held onto the company’s shares has been rewarded a 200% rise in the past 12 months.
However, due to the rocketing share price outpacing Lynas’ earnings, the company’s price-to-earnings (P/E) ratio has jumped to 417 times. Comparatively, the Australian metals and mining industry average P/E ratio is 13.1 times.
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Motley Fool contributor Mitchell Lawler owns shares of Lynas Corporation Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.