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Highlights

  • Pilbara Minerals is an ASX listed pure-play lithium firm with 100% owned project in the Pilbara region of Western Australia.
  • In the financial year 2023 (FY23), the revenue of PLS surged by 242% over the previous corresponding year.
  • PLS share price witnessed an increase of nearly 28% in the last 12 months.

Pilbara Minerals Limited (ASX: PLS) is an Australia-based pure-play lithium company primarily engaged in mining, developing and exploring minerals in Australia. The company owns 100% of the Pilgangoora Project, located in the Pilbara region of Western Australia.

Recently, the company released its 2023 full-year results. The period saw a 64% pcp (previous corresponding period) surge in spodumene concentrate production to 620.1k tonnes, and a significant increase in average realized price to USD 4,447/tonne from USD 2,382/tonne in FY22.

The favourable movement in volume and price metrics resulted in a 242% annual increase in revenue and a 307% increase in EBITDA. 

Here are the key historical financial metrics.

Constructive indicators

During the June quarter, the consumer price index increased by 0.8% over the previous corresponding period (pcp), while the automotive fuel prices slipped by 0.7% on pcp and the diesel prices dropped by 6.5%.

In the Australian energy market, the number of customers repaying energy debt has increased by 0.1% on pcp in the March 2023 quarter. During the stated period, essential spending grew by 1.1%, largely underpinned by a 5.2% surge in electricity, gas and other fuels.

In June 2023, the electricity, gas, water and waste services industry registered the highest increase in the business turnover index as it increased by 12% over the previous month.

Growth prospects

The average residential energy debt decreased by 5.6% on pcp to AUD 999 during the March 2023 quarter.

During the stated period, the capital expenditure in the electricity, gas, water, and waste industry grew by 14.0% on pcp, projecting favourable prospects for expanding productivity.

The demand for Lithium Carbonate Equivalent (LCE) is expected to surge to 1,130k tonnes in 2024, compared to 939k tonnes of demand expected for 2023.

Key risks

As the difference between global supply and demand is reducing, the Australian lithium export is forecasted to fall from the FY23 record. In FY24, lithium exports are anticipated to fall to AUD 17.8 billion and decline further to AUD 14.9 billion in FY25.

Gas consumption decreased in China due to price increases, cheaper domestic substitutes and containment measures. This was the highest decline that the electricity sector witnessed.

Outlook

The Pilgangoora Operations mine life has increased by approximately 9 years to around 34 years following the increase in ore reserve by 55mn tonnes after the mineral resource and drilling campaign update.

The Benchmark Mineral Intelligence (BMI) expects around 27% growth in 2026 to nearly 76% growth in 2040 for global PEV penetration rates.

Share performance of PLS

PLS shares closed 0.65% up at AUD 4.67 apiece on 31 August 2023 with a market capitalization of AUD 13.93 billion. In the past one year, PLS share price has increased by 27.95% and in the past six months, the share price has registered a rise of 14.46%.

The 52-week high of PLS is AUD 5.66 apiece, recorded on 25 October 2022, and the 52-week low is AUD 3.35 apiece, recorded on 23 May 2023. The current share price of PLS is 39.20% higher than its 52-week low.

 

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 31 August 2023. The reference data in this report has been partly sourced from REFINITIV.