Mineral Resources Limited – 1H25 Interim Results Summary
Overall Tone
Mineral Resources Limited (MIN) reported a significant net loss for 1H25, largely impacted by lower commodity prices, impairment charges, and foreign exchange losses. Despite these challenges, the Mining Services division delivered record earnings, benefiting from increased activity at Onslow Iron. The company has maintained strong liquidity but chose not to declare an interim dividend, prioritizing balance sheet flexibility.
Financial Summary
| Metric | 1H25 ($M) | 1H24 ($M) | % Change |
|---|---|---|---|
| Revenue | 2,290 | 2,515 | -9% |
| Underlying EBITDA | 302 | 675 | -55% |
| Operating Cash Flow | (656) | 624 | N/A |
| Adjusted Earnings Before Tax (EBT) | (1,154) | 491 | N/A |
| Normalised EPS (cents) | (410.42) | 281.98 | N/A |
Positive Surprises or Potential Concerns
- Mining Services revenue grew 18% to $1,716M, with EBITDA up 49% to $379M.
- Onslow Iron ramped up successfully, contributing $54M in EBITDA.
- Iron ore and lithium segments struggled due to weaker prices and operational adjustments.
- Bald Hill lithium project placed into care & maintenance (C&M) due to market conditions.
- $352M in impairment charges and $232M foreign exchange losses weighed on results.
Debt Position
MinRes currently holds a substantial debt load, with total borrowings at $5.8B, including senior unsecured notes and revolving credit facilities. The debt profile consists of long-tenor instruments, with no maturities until mid-2027, providing some financial flexibility. However, foreign exchange losses of $331M have negatively impacted the company’s net debt position, highlighting risks associated with currency fluctuations.
Outlook Commentary
MinRes expects Mining Services to continue expanding, supported by new contract wins and Onslow Iron ramp-up. Iron ore performance depends on price recovery, while lithium operations will be closely managed amid weak market conditions. The company is evaluating the potential sale of Yilgarn Hub assets.
Guidance Statements
The company maintains a cautious outlook, focusing on liquidity preservation as Onslow Iron nears completion. Cost-cutting measures in lithium operations are expected to improve financials in 2H25. Capital expenditures will be heavily weighted toward completing Onslow Iron.
Results vs Market Expectations
The reported loss was significantly below expectations, as analysts anticipated weaker earnings but not to this extent. The market had priced in a challenging environment for lithium and iron ore, but the extent of impairments and foreign exchange losses will likely surprise investors. The decision to not declare an interim dividend may also disappoint some shareholders.
Market Positioning
- Share price performance leading into the report: Weak, reflecting softer lithium and iron ore prices.
- 1-week movement: Down, likely in anticipation of a poor earnings result.
- 52-week high comparison: The stock remains well below its 52-week high, reflecting the challenging commodity market and financial pressures.
Disclaimer: This information is provided purely for educational purposes. It takes no account of an individual’s personal financial circumstances and hence can in no way constitute financial advice. The above data may be subject to errors or inconsistencies for which the author takes no liability. It is imperative that all investors do their own research or, if they need advice, seek it from a qualified financial adviser.
Quick Take: H1FY25 ASX:MIN