Mining and energy company Mineral Resources has warned of challenging months ahead after the lithium price slump crushed its annual profit, forcing it to rule out dividend payments.
"We're throwing everything off the deck just to make sure we conserve cash," MinRes founder and managing director Chris Ellison said on Thursday.
"It's not a fun time. I mean this is the sh*ttiest time to be the MD of a company," he told a webcast.
Net profit more than halved to $A114 million in the 12 months to June 30 but cashflow was up nine per cent at $1.9 billion, including iron ore prepayments of $A600m.
The achieved price of lithium fell by more than three quarters (76 per cent) to $US1279 per dry metric tonne, from $US5267.
Mr Ellison said no lithium producers were making money at that price but the management team had decades of experience riding through commodity peaks and troughs.
"Given the stubborn lithium price and our remaining investment in Onslow Iron, we will continue to take a conservative approach during FY25, deferring expansion projects and focusing on cost reduction and cash preservation," he said.
The mining services division, which is less impacted by commodity swings, delivered record underlying earnings of $A550m, an increase of 14 per cent.
Onslow Iron delivered its first ore on ship ahead of schedule in May and mining continues to ramp up with construction of the haul road scheduled for completion in October.
"The energy division enjoyed further success in our natural gas exploration program in the Perth Basin," Mr Ellison said.
"We continue to encourage the state government to update the WA Domestic Gas Policy to incentivise investment, exploration and additional supply."
To preserve cash, the board decided not to declare a final dividend for 2023/24.
