Shareholders will be rubbing their hands together following the latest results from this mining giant…
The post Mineral Resources (ASX:MIN) share price slips on FY21 earnings appeared first on The Motley Fool Australia. –
Investors are selling down the Mineral Resources Limited (ASX: MIN) share price upon market open on Wednesday.
This is on the back of the major miner reporting its full-year results to the ASX this morning.
Mineral Resources share price on watch after net profit more than triples
Underlying net profit after tax up 230% year on year to $1,103 million
Revenue up 76% to $3,734 million
Operating cash flow up 144% to $1,600 million
Underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) up 148% to $1,901 million
Profit for the year attributable to shareholders up 26.5% to $1,269.7 million
Fully franked final dividend of 175 cents per share. Full year dividend up 175% to $2.75 per share.
What happened in FY21 for Mineral Resources
The Mineral Resources share price could be on the move today after the fifth largest iron ore producer reported its record-setting FY21 results.
On the top line, the company generated $3,734 million in group revenue during the 12-month period. This was 76% higher year on year and driven by continued growth across the business. For instance, mining services experienced an increase in volumes of 20%. Meanwhile, iron ore and spodumene exports both surged 23% compared to the prior corresponding period (pcp).
Additionally, the bottom line benefitted by increasing commodity prices during the year. The Platts Iron Ore 62% Fines Index (Platts) gained 66% to an average of US$155 per dry metric tonne. On the other hand, the average realised lithium spodumene price came in at $535 per dry metric tonne, a decrease of 13% on the pcp. A macro catalyst that has seen the Mineral Resources share price rise 113% in the past year.
Furthermore, total exports surpassed the previous year with total iron ore equating to 17.274 million wet metric tonnes. The increase in export volume and prices resulted in Mineral Resources delivering an underlying net profit after tax of $1,100 billion – an increase of 230%.
Likewise, the company’s mining services business performed strongly and was primarily driven by growth in operations at the Yilgarn and Utah Point hubs. This was in addition to new external contracts.
The strong performance leaves Mineral Resources with a sturdy cash balance of $1,542 million at 30 June 2021. This is despite the miner pouring $745 million into investments for growth into the future. For example, the development of Wonmunna for the Utah Point hub, increasing Yilgarn Hub production, and new external mining services plants to support new contracts.
Another plus of abundant cash flow was that management declared a final fully franked dividend of $1.75 per share. Mineral Resource shareholders will see nearly $330 million returned to them in the process.
What did management say?
Commenting on the blockbuster result, Mineral Resources Managing Director Chris Ellison said:
I am proud to say that Mineral Resources has delivered a record year in terms of tonnes produced and shipped, revenue and profit reported, and dividends declared. The full-year result is the culmination of continued strong growth in our Mining Services division, which is our Company’s heartbeat, and realises the rewards from our decision to build long horizon businesses in iron ore and lithium.
What’s next for Mineral Resources and its share price?
Closing out Mineral Resources’ results, the company shed some light on its future direction. The plan is to “develop innovative, lower carbon mining services materials handling and infrastructure solutions”, something that bodes well following yesterday’s IPCC climate report findings.
Finally, the miner gave some guidance for FY22. The company is forecasting 21 million tonnes to 22 million tonnes in iron ore exports between the Yilgarn hub and Utah point hub for FY22. Meanwhile, Mineral Resources expects 450,000 to 475,000 tonnes in spodumene exports during the next full year.
The Mineral Resources share price has delivered sizeable returns to shareholders in the past year. Specifically, the miner’s shares have climbed 113% in value compared to the 23.2% from the S&P/ASX 200 Index (ASX: XJO).
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Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. 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.