- Lynas (LYC) has reported a 941 per cent jump in half-year profit as prices for rare earths climb in line with global interest for electric vehicles
- Net profit came to $40.6 million, beating estimates from Swiss investment bank UBS by 56 per cent and far exceeding last year’s result of just $3.9 million
- Despite the pandemic, China’s domestic price for neodymium and praseodymium grew from US$35.9 (roughly A$45.63) per kilogram in December 2019 to US$55.5 (roughly A$70.54) per kilogram in December 2020
- The world’s second largest producer of rare earths has more than $500 million in cash and short-term deposits with which to progress its Lynas 2025 growth initiatives
- Lynas is down 1.68 per cent to $5.56 per share
Lynas (LYC) has reported a 941 per cent jump in half-year profit as prices for rare earths climb in line with global interest for electric vehicles.
For the six months ending December 31, 2020, net profit came to $40.6 million, beating an estimate of $26 million from Swiss investment bank UBS by 56 per cent and far exceeding last year’s result of just $3.9 million.
Revenue also grew 12.4 per cent from $180.1 million to $202.5 million, with record sales achieved in the December quarter despite the company’s Malaysian processing plant operating at 75 per cent of capacity.
The strong performance reflects a steep increase in the price of neodymium and praseodymium — used to make magnets for electric vehicles — which grew from US$35.9 (roughly A$45.63) per kilogram in December 2019 to US$55.5 (roughly A$70.54) per kilogram in December 2020.
While Lynas warned that it was still too early make a full assessment of global demand for rare earths, it said the market has been less affected by the pandemic than others and that electric car penetration appears to be accelerating in Europe and Asia, primarily China.
The world’s second largest producer of rare earths, and the largest outside of China, has more than $500 million in cash and short-term deposits with which to progress its Lynas 2025 growth initiatives.
These include a proposed processing facility in Kalgoorlie, upgrades at the Lynas Malaysia plant, and phase one planning and design work for a U.S.-based Heavy Rare Earths separation facility, which is expected to be completed during the 2021 financial year.
“Our team remains absolutely focused on serving our long-term strategic customers with high quality products and on contributing to the development of a sustainable rare earths supply chain outside China,” said Lynas’ Managing Director and CEO, Amanda Lacaze.
Lynas is down 1.68 per cent to $5.56 per share at 10:58am AEDT.