IGO Limited Faces Weaker-than-Expected Quarter: What Went Wrong?
Source: Kapitales Research
Highlights:
Revenue Miss: IGO Limited reported a revenue shortfall to AU$82 million, with EBITDA at AU$30 million at the group level during the December quarter.
Greenbushes Performance: Greenbushes lithium mine saw a 10% increase in production, and the average realized spodumene price rose 16% to US$850/t.
Kwinana Challenges: The Kwinana lithium hydroxide refinery operated at 35% capacity, resulting in an AU$51 million EBITDA loss due to maintenance outages.
Quarterly Results Reveal Challenges at Kwinana and Nova
IGO Limited (ASX: IGO), an Australian mining and exploration company, reported weaker-than-expected financial results for the December quarter, with stock prices declining nearly 7% at the time of writing. Despite improvements in operational aspects at its Nova and Greenbushes operations, the company faced headwinds that led to a revenue miss of AU$82 million and an EBITDA at AU$30 million at the group level.
Greenbushes Shines, But Kwinana Struggles
At its Greenbushes lithium mine, production increased by 10%, driven by higher ore grades and volumes.
This positive performance saw an increase in spodumene sales, but a shipment delay caused a shortfall in expected sales. The average realized spodumene price jumped 16%, reaching US$850/t, positively impacting Greenbushes' EBITDA margin, which rose to 64%. Meanwhile, the Kwinana lithium hydroxide refinery underperformed, operating at only 35% capacity due to maintenance outages, and incurred an EBITDA loss of AU$51 million.
Nova Nickel Production Steady Despite Shipping Delays
The Nova operation performed relatively well, producing 3,790 tons of nickel and 1,776 tons of copper. However, sales were lower than anticipated, in line with the shipping plan. Despite this, Nova’s EBITDA surged by 70% to AU$42 million, benefitting from favorable inventory adjustments and a 34% reduction in cash costs.
Outlook and Guidance
IGO maintains a cautious outlook, particularly for its lithium operations. Greenbushes is expected to slightly miss its production guidance, while Kwinana’s capacity remains a concern. The company has also reiterated its focus on cost control, especially given the uncertainty in the lithium market and the potential for price moderation.
Disclaimer for Kapitales Research
The materials provided by Kapitales Research, including articles, news, data, reports, opinions, images, charts, and videos ("Content"), are intended for personal, non-commercial use only. The primary goal of this Content is to educate and inform readers. This Content is not meant to offer financial advice, nor does it include any recommendation or opinion that should be relied upon for making financial decisions. Certain Content on this platform may be sponsored or unsponsored, but it does not serve as a solicitation or endorsement to buy, sell, or hold any securities, nor does it encourage any specific investment activities. Kapitales Research is not authorized to provide investment advice, and we strongly advise users to seek guidance from a qualified financial professional, such as a financial advisor or stockbroker, before making any investment choices. Kapitales Research disclaims all liability for any direct, indirect, incidental, or consequential damages arising from the use of the Content, which is provided without any warranties. The opinions expressed by contributors or guests are their own and do not necessarily reflect the views of Kapitales Research. Media such as images or music used on this platform are either owned by Kapitales Research, sourced through paid subscriptions, or believed to be in the public domain. We have made reasonable efforts to credit sources where appropriate. Kapitales Research does not claim ownership of any third-party media unless explicitly stated otherwise.
Customer Notice:
Nextgen Global Services Pty Ltd trading as Kapitales Research (ABN 89 652 632 561) is a Corporate Authorised Representative (CAR No. 1293674) of Enva Australia Pty Ltd (AFSL 424494). The information contained in this website is general information only. Any advice is general advice only. No consideration has been given or will be given to the individual investment objectives, financial situation or needs of any particular person. The decision to invest or trade and the method selected is a personal decision and involves an inherent level of risk, and you must undertake your own investigations and obtain your own advice regarding the suitability of this product for your circumstances. Please be aware that all trading activity is subject to both profit & loss and may not be suitable for you. The past performance of this product is not and should not be taken as an indication of future performance.
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IGO Limited Faces Weaker-than-Expected Quarter: What Went Wrong?
Highlights:
Quarterly Results Reveal Challenges at Kwinana and Nova
IGO Limited (ASX: IGO), an Australian mining and exploration company, reported weaker-than-expected financial results for the December quarter, with stock prices declining nearly 7% at the time of writing. Despite improvements in operational aspects at its Nova and Greenbushes operations, the company faced headwinds that led to a revenue miss of AU$82 million and an EBITDA at AU$30 million at the group level.
Greenbushes Shines, But Kwinana Struggles
At its Greenbushes lithium mine, production increased by 10%, driven by higher ore grades and volumes.
This positive performance saw an increase in spodumene sales, but a shipment delay caused a shortfall in expected sales. The average realized spodumene price jumped 16%, reaching US$850/t, positively impacting Greenbushes' EBITDA margin, which rose to 64%. Meanwhile, the Kwinana lithium hydroxide refinery underperformed, operating at only 35% capacity due to maintenance outages, and incurred an EBITDA loss of AU$51 million.
Nova Nickel Production Steady Despite Shipping Delays
The Nova operation performed relatively well, producing 3,790 tons of nickel and 1,776 tons of copper. However, sales were lower than anticipated, in line with the shipping plan. Despite this, Nova’s EBITDA surged by 70% to AU$42 million, benefitting from favorable inventory adjustments and a 34% reduction in cash costs.
Outlook and Guidance
IGO maintains a cautious outlook, particularly for its lithium operations. Greenbushes is expected to slightly miss its production guidance, while Kwinana’s capacity remains a concern. The company has also reiterated its focus on cost control, especially given the uncertainty in the lithium market and the potential for price moderation.
Disclaimer for Kapitales Research
The materials provided by Kapitales Research, including articles, news, data, reports, opinions, images, charts, and videos ("Content"), are intended for personal, non-commercial use only. The primary goal of this Content is to educate and inform readers. This Content is not meant to offer financial advice, nor does it include any recommendation or opinion that should be relied upon for making financial decisions. Certain Content on this platform may be sponsored or unsponsored, but it does not serve as a solicitation or endorsement to buy, sell, or hold any securities, nor does it encourage any specific investment activities. Kapitales Research is not authorized to provide investment advice, and we strongly advise users to seek guidance from a qualified financial professional, such as a financial advisor or stockbroker, before making any investment choices. Kapitales Research disclaims all liability for any direct, indirect, incidental, or consequential damages arising from the use of the Content, which is provided without any warranties. The opinions expressed by contributors or guests are their own and do not necessarily reflect the views of Kapitales Research. Media such as images or music used on this platform are either owned by Kapitales Research, sourced through paid subscriptions, or believed to be in the public domain. We have made reasonable efforts to credit sources where appropriate. Kapitales Research does not claim ownership of any third-party media unless explicitly stated otherwise.
Customer Notice:
Nextgen Global Services Pty Ltd trading as Kapitales Research (ABN 89 652 632 561) is a Corporate Authorised Representative (CAR No. 1293674) of Enva Australia Pty Ltd (AFSL 424494). The information contained in this website is general information only. Any advice is general advice only. No consideration has been given or will be given to the individual investment objectives, financial situation or needs of any particular person. The decision to invest or trade and the method selected is a personal decision and involves an inherent level of risk, and you must undertake your own investigations and obtain your own advice regarding the suitability of this product for your circumstances. Please be aware that all trading activity is subject to both profit & loss and may not be suitable for you. The past performance of this product is not and should not be taken as an indication of future performance.
Kapitales Research, Level 13, Suite 1A, 465 Victoria Ave, Chatswood, NSW 2067, Australia | 1800 005 780 | info@kapitales.com.au