Pilbara’s Profit Plummets by 89 Percent due to Decrease in Lithium Prices
Lithium is a key component in electric vehicle batteries.
Pilbara Minerals, a major player in the lithium industry, reported a significant 89 percent decline in profits on Aug. 26 due to falling commodity prices. The company’s financial year ending in 2024 showed a drop in statutory net profit after tax to $257 million (US$174 million), down 89 percent from the previous year. Pilbara Minerals owns the Pilgangoora Operation, the largest hard rock lithium project in the world, located near Port Headland in Western Australia.
This profit decline was primarily driven by a 74 percent drop in the price of spodumene concentrate, which contains lithium and is a core product for Pilbara Minerals.
Results Snapshot
In the 2024 financial year, Pilbara saw a decrease in average realized price for spodumene concentrate, dropping to US$1,176 per dry metric tonne from US$4,447 in 2023. Revenue fell by 69 percent to $1.254 billion, and earnings before interest, taxes, depreciation, and amortization (EBITDA) decreased by 84 percent to $538 million. The underlying profit after tax also saw an 86 percent decline to $318 million.
Despite the challenges faced in the market, Pilbara maintained a 43 percent EBITDA margin, indicating their ability to generate profit in relation to their revenue.
Pilbara Minerals also saw a boost in production levels, reaching 725.3 thousand dry metric tonnes compared to the previous financial year.
Lithium Price Weighs on Results
Chairman Kathleen Conlon acknowledged the impact of falling lithium prices on the company’s financial performance in 2024. Despite this, she highlighted Pilbara’s ability to maintain strong operational performance and adapt to market conditions.
She also expressed optimism for long-term lithium demand, especially with the global shift towards sustainable energy sources.
In the same financial year, Pilbara achieved its highest-ever production of spodumene concentrate at the Pilgangoora Operation and increased sales by 16 percent compared to the previous year.
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