Shares in Liontown Resources (ASX: LTR) were up around 3% at noon after the Gina Rinehart-backed lithium miner and former market darling revealed that it had halved its 1H loss of $30.9 million recorded over the previous period.
Underscoring 1H FY25 revenue of $100.4 million was the sale of 100,240 tonnes of spodumene concentrate after turning out first production from Kathleen Valley near Leinster in WA’s northern Goldfields.
The average realised price was US$811/dmt.
However, management advised that the cost of goods sold would equal revenue until commercial production was called for at the Kathleen Valley processing plant.
This resulted in Liontown recording zero gross profit for the half and a net loss before tax of $15.2 million.
With the ramp up of production at the Kathleen Valley lithium operation performing strongly across the period, the board approved the declaration of commercial production effective from 1 January 2025.
This means the capitalisation of commissioning costs will cease from this date.
Commenting on today’s results, the company’s managing director Antonino Ottaviano told investors that the company continues to experience strong inbound interest from customers for any available spodumene tonnes.
What’s driving demand for high-grade lithium concentrate, added Ottaviano is the continued global growth of electric vehicles and other battery storage solutions.
Lithium demand is estimated to have grown 25% year on year in 2024, and Liontown expects a 10% forecasted compound annual growth rate (CAGR) through to 2035.
Overall, Liontown reported underlying earnings of $66 million for the half.
Key highlights of the Company’s operations during H1 FY25, include:
- The Company had 24,904 dmt of saleable spodumene concentrate on hand at the end of the period.
- Strong ramp-up of the processing plant with a total of 116,854 dry metric tonnes (dmt) of spodumene concentrate produced to 31 December.
- First spodumene concentrate delivery to long-term foundation offtake customer LG Energy Solution, Ltd occurred in December 2024.
- Renewable power penetration from the Kathleen Valley Hybrid Power Station exceeded 80% for the period, well above the 60% target.
Last November Liontown told investors it would scale back production plans just three months after it delivered its maiden load of lithium to preserve cash, preferring to wait out a depressed market that shows few signs of a sustainable price rebound.
The company closed the period with total debts of $844.3 million and cash equivalents of $192.9 million as at 31 December 2024.
Liontown has a market cap of $1.5 billion making it an ASX300 stock; the share price is down 53% over one year and up 20% year to date.
Sentiment among investors may be improving. The weak trend in the 200-day moving average shows that sellers have been more aggressive than buyers for some time.
Consensus is Hold.
This article does not constitute financial product advice. You should consider independent advice before making financial decisions.
