Australian miner Mineral Resources (MinRes) (OTC:MALRF) has had its worst trading day since the Great Recession. Shares plunged 22.1% in Australia, wiping out nearly five years of stock gains.
The stock slide was caused by a large drop in EBITDA and slashed fiscal 2025 production guidance.
The firm's adjusted EBITDA fell by 55% to roughly $191 million (A$302 million), down from roughly $428.5 million (A$675 million) a year earlier. The net profit after tax went from A$530 million in the first half of fiscal 2024 to a loss of A$807 million.
This result included a post-tax impairment charge of A$352 million related to the Bald Hill lithium mine and an A$232 million foreign exchange impairment.
Across its divisions, the company faced multiple setbacks. Mining Services was the only bright spot, delivering record EBITDA of A$379 million, up 49% from the prior year, driven by stable production volumes and contributions from the newly operational Onslow Iron Road Trust.
However, iron ore shipments fell short of expectations, totaling 9.7 million wet metric tons (wmt), despite an 11% year-over-year increase. The weighted average realized price for iron ore dropped to $83 per dry metric ton (dmt), a 25% decline compared to last year.
The lithium segment struggled amid weak global demand. Although shipments increased to 261,000 dmt of spodumene concentrate, prices plummeted to $820 per ton from $1,719 per ton in 1H24.
Bald Hill was placed into care and maintenance in November, driven by lithium market conditions. Meanwhile, MinRes' energy business secured an A$1.1 billion transaction with Hancock Prospecting for its gas assets, providing a much-needed liquidity boost.
MinRes sharply cut its iron ore shipment guidance for fiscal 2025, lowering expectations to 8.8–9.3 million tons from its previous 10.5–11.7 million tons forecast.
CEO Chris Ellison blamed these reductions on extreme weather, particularly Cyclone Sean, which caused severe flooding and damaged parts of the Onslow Iron haul road. However, he expects the haulage to continue.
"Capital expenditure peaked in the first half, and Onslow Iron is now generating positive cash flow, which will enable us to accelerate efforts to deleverage the balance sheet," Ellison said. The company is also attempting to strengthen its balance sheet by offloading high-cost iron ore mines in Western Australia's Yilgarn region.
A prominent figure in the mining sector, Ellison, recently paid an A$3.79 million penalty following an internal investigation into his conduct and misuse of company resources. The company also confirmed that Ellison, the largest shareholder with an 11.5% stake, will step down by April 2026.
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