Statutory Loss Masks Liontown’s Strong Cash Flow as Underground Transition Looms
Liontown Resources reports a strong first operational year at Kathleen Valley with $298 million revenue and $55 million underlying EBITDA despite lithium price pressures. The company is now gearing up for a strategic transition to underground mining backed by a robust $528 million cash position.
- First year of operations completed with commercial production declared January 2025
- $298 million revenue and $55 million underlying EBITDA amid weak lithium prices
- Statutory net loss of $193 million driven by non-cash write-downs and amortisation
- Post-year equity raise boosts pro forma cash to $528 million for underground transition
- Strong sustainability focus with 81% renewable power and community partnerships
A Milestone Maiden Year
Liontown Resources has marked its first full year of operations at the Kathleen Valley lithium project with a solid financial and operational performance. Starting production of spodumene concentrate in July 2024 and declaring commercial production by January 2025, the company generated $298 million in revenue during FY25 despite a challenging lithium price environment. This achievement underscores the resilience of Liontown’s ramp-up strategy and operational execution.
Financials Reflect Transition Phase
While the underlying EBITDA of $55 million, representing an 18% margin, highlights operational strength, the statutory net loss after tax of $193 million reflects the accounting impact of non-cash items. These include an $81 million write-down of ore sorting potential stockpiles and significant amortisation and depreciation costs associated with the newly commissioned plant and deferred waste. Importantly, operating cash flow was breakeven, supported by disciplined cost management and $112 million in cost savings and deferrals.
Capital and Cash Position Bolster Growth Plans
Capital expenditure of $331 million was primarily directed toward construction and commissioning activities, with all project capital for the current mine plan now delivered. Post year-end, Liontown completed an equity raising that increased pro forma cash to $528 million, significantly strengthening the balance sheet. This liquidity positions the company to fund the upcoming transition to underground mining operations, which are expected to unlock improved recoveries and cost efficiencies from FY27 onwards.
Looking Ahead, A Tale of Two Halves
CEO Tony Ottaviano described FY26 as a “tale of two halves,” anticipating elevated unit costs and lower recoveries in the first half due to dual open pit and underground operations and processing of lower-grade stockpiled material. However, improvements are expected in the second half as higher-grade underground ore becomes the primary feed, targeting a recovery rate of approximately 70%. This transition is critical to establishing Liontown as a globally significant and sustainable lithium supplier.
Sustainability and Community Engagement
Liontown’s commitment to sustainability was evident with 81% renewable power penetration at Kathleen Valley, achieved through an integrated solar, wind, and battery hybrid power station. The company’s efforts earned external recognition with the 2025 Excellence in Renewable Energy in Mining Award. Additionally, partnerships with local Traditional Owners and awarding contracts to Tjiwarl-owned enterprises highlight a focus on shared value creation and regional economic participation.
Bottom Line?
As Liontown transitions underground, investors will watch closely for improved recoveries and cost efficiencies to validate the company’s long-term growth trajectory.
Questions in the middle?
- How quickly will underground operations ramp up to meet recovery and production targets?
- What impact will lithium price fluctuations have on Liontown’s profitability in FY26 and beyond?
- How will ongoing sustainability initiatives influence operational costs and stakeholder support?