Pilbara Minerals Ltd

Pilgangoora began commercial production back in April 2019. The first 12 months were tough because of the oversupply in the lithium market and, in early 2020, the Corona Crash. But the share price recovered in conjunction with the lithium price and increased demand for electric vehicles. Governments have made their carbon emission targets clearer, ushering in a new era of electric powered transportation. And the rise of Tesla has led to almost all other car manufacturers scrambling to catch up. Pilbara Minerals timed its run perfectly, signing a five-year offtake agreement with Chinese lithium producer Yibin Tianyi back on 25 March 2020. And in October of that year, it bought the Altura Lithium Operations for US$175m, expanding the Pilgangoora operation and leveraging the lithium price recovery. Beyond its lithium resource, the company is building a 6MW solar farm at Pilgangoora and has a joint venture agreement with POSCO to develop a lithium hydroxide conversion facility in South Korea. In FY23, Pilbara Minerals made $4.1bn in revenue, up from $1.2bn just 12 months prior, off the back of 607.5kt in lithium shipped, up 68% from the year before – at an average lithium price of 87% higher than the year before. The company’s post-tax profit came in at $2.4bn, up from $0.6bn just a year earlier and it paid a dividend of 25c per share. It closed the period with a $3.3bn cash balance. But in 2024, lithium prices crashed – PLS’ realised price was down 74% in 12 months from US$4,447/t to US$1,176/t. And so its revenues fell 69% to $1.25bn and its profit shrank over 85% to be $318m on an underlying basis and $257m on a statutory basis. FY25 was little better, but there are signs FY26 could be a better year as lithium prices recover. Its NPAT was 147% higher than 12 months prior and the company also increased production while reducing operating costs.