Lithium stalwart barely breaks even as rout continues

Critical minerals producer IGO has barely broken even as the ongoing lithium and nickel slump bursts the battery minerals bubble.

Net profit after tax was $2.8 million for the 12 months to June 30, which was 99 per cent down from $549 million a year earlier, IGO reported on Thursday.

Revenue was $841 million, down 18 per cent from $1.02 billion a year earlier, while underlying earnings before interest, tax, depreciation and amortisation fell almost three-quarters to $581 million.

“Operationally, we have worked to adapt to the changing market conditions and the increased volatility in our markets," chief executive Ivan Vella said.

He said a "refreshed strategy" would be ready for release in a matter of weeks.

The results for the year include an impairment charge of $172 million against the mothballed Cosmos nickel operations and Forrestania, adding to an earlier writedown that almost wiped out the value of the nickel assets bought just two years ago.

A further $286 million write-down was recorded against IGO's exploration portfolio. 

Underlying net profit after tax, which excludes these impairment expenses among other adjustments, was $319 million.

"Within our nickel business, our low-cost Nova Operation continued to generate strong free cash flow despite the commodity price headwinds that contributed to our decision to put Cosmos into care and maintenance," Mr Vella said.

But the company said its share of the world's largest hard-rock lithium mine Greenbushes, 250km south of Perth, delivered solid earnings to the group, despite falling spodumene and lithium hydroxide prices.

"The quality of Greenbushes continues to shine through, with a solid production and cost result underpinning strong margins and cash flow, via our joint venture," Mr Vella said. 

Partnered with China's Tianqi Lithium Corporation, IGO's share of the Greenbushes' net profit was $553 million, down from $1.6 billion a year earlier.

The Kwinana refinery ramped up with Train 1 achieving 3508 tonnes of lithium hydroxide production, an 86 per cent increase on the prior year, with 90 per cent of the finished product meeting battery grade standards. 

IGO had net cash balances of $468 million and liquidity of $1.188 billion at June 30, compared with net cash of $415 million and liquidity of $775 million in the prior year.

The board declared a final fully franked dividend of 26 cents per share, which slashed the full-year's payout by half.

License this article

What is AAPNews?

For the first time, Australian Associated Press is delivering news straight to the consumer.

No ads. No spin. News straight-up.

Not only do you get to enjoy high-quality news delivered straight to your desktop or device, you do so in the knowledge you are supporting media diversity in Australia.

AAP Is Australia’s only independent newswire service, free from political and commercial influence, producing fact-based public interest journalism across a range of topics including politics, courts, sport, finance and entertainment.

What is AAPNews?
The Morning Wire

Wake up to AAPNews’ morning news bulletin delivered straight to your inbox or mobile device, bringing you up to speed with all that has happened overnight at home and abroad, as well as setting you up what the day has in store.

AAPNews Morning Wire
AAPNews Breaking News
Breaking News

Be the first to know when major breaking news happens.


Notifications will be sent to your device whenever a big story breaks, ensuring you are never in the dark when the talking points happen.

Focused Content

Enjoy the best of AAP’s specialised Topics in Focus. AAP has reporters dedicated to bringing you hard news and feature content across a range of specialised topics including Environment, Agriculture, Future Economies, Arts and Refugee Issues.

AAPNews Focussed Content
Subscription Plans

Choose the plan that best fits your needs. AAPNews offers two basic subscriptions, all billed monthly.

Once you sign up, you will have seven days to test out the service before being billed.

AAPNews Full Access Plan
Full Access
AU$10
  • Enjoy all that AAPNews has to offer
  • Access to breaking news notifications and bulletins
  • Includes access to all AAPNews’ specialised topics
Join Now
AAPNews Student Access Plan
Student Access
AU$5
  • Gain access via a verified student email account
  • Enjoy all the benefits of the ‘Full Access’ plan at a reduced rate
  • Subscription renews each month
Join Now
AAPNews Annual Access Plan
Annual Access
AU$99
  • All the benefits of the 'Full Access' subscription at a discounted rate
  • Subscription automatically renews after 12 months
Join Now

AAPNews also offers enterprise deals for businesses so you can provide an AAPNews account for your team, organisation or customers. Click here to contact AAP to sign-up your business today.

SEVEN DAYS FREE
Download the app
Download AAPNews on the App StoreDownload AAPNews on the Google Play Store