The Mineral Resources Limited (ASX: MIN) share price will be on watch this morning after releasing its half-year results for 2021.
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In early trading today, the Mineral Resources share price is up almost 2% at $37.67.
How did Mineral Resources perform?
Mineral Resources delivered an exceptional six months of trading despite disruptive first-half trading conditions.
For the period ending 31 December, the company reported total revenue of $1,530.5 million. This reflected an increase of 55% on the previous $986.7 million attained in first-half of FY20.
Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) soared to $763 million, a jump of 131% on the previous corresponding period (pcp).
Both metrics were driven by mining services growth from the Yilgarn Hub and increased iron ore exports to existing customers. Record iron ore sales stood at 7.9 million tonnes at the Yilgarn Hub. The rise of the iron ore spot price also contributed to the result, moving 33% higher to US$126 per dry tonne.
The strong iron ore result partially offset the reduced revenues received from its lithium counterpart mines. This was due to its lithium operations receiving a lower price for spodumene concentrate. The average realised price of the battery-making ingredient came to $459 per dry tonne, a reduction of $230 per dry tonne – 50% on the same time last year.
Mineral Resources’ net profit after tax (NPAT) surged to $430 million, up 233% over the same time last year.
Operating cash flow improved to $516 million when excluding the tax paid from the sale of its 60% interest in Wodgina Lithium Plant. This reflected a $303 million increase over the pcp.
Diluted earnings per share (EPS) fell to 275.27 cents against the same time last year, which saw EPS at 470.06 cents.
Mineral Resources declared a cash balance of $1.1 billion on hand, down $193 million. However, undrawn debt facilities of $364 million give the company room to support its future business development activities.
The board declared a fully franked interim dividend of 100 cents to be paid to eligible shareholders on 9 March 2021. This is a 335% jump compared to the previous interim dividend (23 cents paid to shareholders).
Words from the managing director
Mineral Resources managing director Chris Ellison welcomed the results, saying:
Despite the backdrop of COVID-19, Mineral Resources has delivered outstanding operational and financial performance in the December half, demonstrating the strength of our business and the ability to maximise returns when commodities like iron ore are doing well. It also vindicates our decision to invest heavily across our iron ore business during the past few years.
Likewise, Mt Marion has outperformed during this period to deliver record production volumes at lower costs, a remarkable achievement for a spodumene operation in what has been a challenging market. Pleasingly, we are seeing some positive signs in the lithium market and Mineral Resources is well positioned to benefit from this commodity’s upturn as the world renews its focus on green energy and demands greater volumes of high-quality spodumene concentrate.
About the Mineral Resources share price
Over the past 12 months, the Mineral Resources share price has gained almost 120% for patient investors. Its shares hit a low of $6.94 in March, before zooming to reach an all-time high of $41.19 last month.
Based on the current share price, Mineral Resources commands a market capitalisation of close to $7 billion.
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Motley Fool contributor Aaron Teboneras 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.