Highlights

  • Lynas is an Australian rare earth material producing and company
  • In the 1HFY23, the company registered revenue growth of 17.5% over the previous corresponding period
  • The company has invested AUD 240 million in capital projects to take advantage of growing demand for rare earth materials

Lynas Rare Earths Ltd (ASX: LYC) is a rare earth materials producer with a processing plant in Malaysia, from where it transports its output to manufacturing markets in the United States, Europe and Asia.

The ASX-listed materials company is registering production growth in the last four quarters.

During the first half of the financial year 2023 (1HFY23), the company delivered 17.5% on pcp (previous corresponding period) growth in revenue to AUD 370 million. At the same time, the net profit after tax dropped by 4.3% on pcp to AUD 150.10 million due to increased costs (especially for chemical inputs) and production challenges. The period saw growth in demand and mitigation of cost pressure with increased operational efficiencies. Here is the historical financial performance of LYC:

Top 10 shareholders of LYC

The top 10 shareholders of LYC together hold around 26.50% shareholding in the company. Challenger Managed Investments Limited and The Vanguard Group, Inc. have the highest shareholding in the company, with a stake of approximately 5.04% and 5.00%, respectively.

Recent business update

Through an ASX filing dated 1 August 2023, LYC informed that it has inked a follow-on contract with the U.S. Department of Defense (DoD) for building heavy rare earth components of the Lynas U.S. rare earth processing facility in Texas. Currently, the U.S. government’s contribution of USD 258 million is allocated to the project. Earlier inJune 2022, the contribution of USD 120 million was announced.

In another update, dated 26 July 2023, the company shared that Lynas Malaysia seeks the review of Malaysian licence conditions, which prohibits the processing and import of lanthanide concentrate. For the same, the company has filed two judicial review proceedings before the high court of Malaya.

Outlook

Rare earth minerals are crucial for the global energy transition The E.V. and wind energy market are also anticipated to drive the demand for rare earth.

In 1HFY23, the company saw growth in ROE production and a surge in the average selling price per kg. Considering this, the company has invested AUD 240 million in capital projects, which is anticipated to enhance production capacity and bring operational efficiencies. Therefore, it is expected that Lynas will benefit from the growing demand.

The stock performance of Lynas

Lynas shares closed 1.12% down at AUD 7.09 apiece on 23 August 2023 with a market capitalization of AUD 6.69 billion. With this, in the last 12 months, Lynas’ stock witnessed a fall of 20.06%, and in the past one month, the stock price increased by 7.09%.

The 52-week high of LYC is AUD 9.845 apiece, recorded on 1 February 2023, and the 52-week low is AUD 6.02 apiece, recorded on 6 April 2023.

 

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

 

Note 2: The reference date for all price data, currency, is 23 August 2023. The reference data in this report has been partly sourced from REFINITIV.