How Pilbara Minerals Boosted Production Despite a 39% Revenue Slide
Pilbara Minerals reported a 4% increase in lithium production for FY25 despite a 39% revenue drop amid falling prices, maintaining a robust balance sheet and outlining optimistic FY26 growth plans.
- 4% production increase to 754.6kt in FY25
- 39% revenue decline due to lower lithium prices
- Underlying EBITDA down 83% to $97 million
- Strong cash balance of ~$1.0 billion and total liquidity of $1.6 billion
- FY26 guidance targets higher production, lower costs, and reduced capital expenditure
Steady Production Growth Amid Price Pressure
Pilbara Minerals Limited (ASX, PLS) has delivered its FY25 financial results, revealing a 4% increase in lithium concentrate production to 754.6 kilotonnes, alongside a 7% rise in sales volume. This operational growth comes despite a challenging market environment marked by a 39% decline in revenue to $769 million, primarily driven by a significant drop in lithium prices.
The company’s underlying EBITDA fell sharply by 83% to $97 million, reflecting the impact of lower prices. Nevertheless, Pilbara Minerals managed to keep its operations profitable on an underlying basis, supported by cost efficiencies from its P850 operating model and expanded production capacity through the P1000 project.
Cost Discipline and Operational Efficiency
Operating costs increased modestly by 3% to $476 million on a free-on-board (FOB) basis, but unit operating costs actually declined by 4% FOB and 10% on a cost-insurance-freight (CIF) basis. These reductions were achieved through higher production volumes and ongoing efficiency initiatives, including the commissioning of the world’s largest lithium ore sorter and the implementation of the P850 operating model.
Capital expenditure remained substantial at $653 million, primarily invested in the P1000 expansion and infrastructure projects, with a focus on sustaining growth and operational flexibility. Despite this, the company closed the year with a strong cash position of approximately $1.0 billion and total liquidity of $1.6 billion, underscoring robust balance sheet management.
Strategic Growth and Diversification
Beyond operational performance, Pilbara Minerals advanced key strategic initiatives. The company acquired the Colina Project in Brazil, expanding its asset portfolio and geographic footprint. Construction of the Mid-Stream Demonstration Plant resumed following government funding, aiming to enhance downstream processing capabilities.
Additionally, Pilbara Minerals holds an 18% stake in a lithium hydroxide joint venture in South Korea, with progress reported on battery-grade lithium hydroxide production. These moves align with the company’s broader strategy to diversify revenue streams and capture more value along the battery materials supply chain.
Sustainability and Community Engagement
On the sustainability front, Pilbara Minerals reported a 7.1% reduction in absolute scope 1 and 2 emissions and a 20% decrease in power-related greenhouse gas intensity. The company also increased First Nations employment to 3.1% and invested $30.5 million in First Nations businesses, reflecting a commitment to social responsibility and community partnerships.
Outlook and FY26 Guidance
Looking ahead, Pilbara Minerals projects production volumes between 820 and 870 kilotonnes for FY26, with unit operating costs expected to fall further to between A$560 and A$600 per tonne FOB. Capital expenditure guidance is set at $300 to $330 million, reflecting a disciplined approach to investment amid ongoing market volatility.
The company’s focus remains on operational excellence, cost discipline, and maintaining growth optionality through targeted exploration and development projects, including the Colina Project and downstream chemical processing ventures.
Bottom Line?
Pilbara Minerals’ FY25 results underscore resilience through market volatility, setting the stage for disciplined growth and operational refinement in FY26.
Questions in the middle?
- How will Pilbara Minerals navigate ongoing lithium price volatility in FY26?
- What progress and impact can be expected from the Mid-Stream Demonstration Plant and downstream JV?
- How will the Colina Project acquisition influence Pilbara Minerals’ future production and diversification?