ANOTHER PRODUCTIVE YEAR ACROSS ALL MINRES BUSINESS PILLARS SUPPORTED A STRONG FINANCIAL PERFORMANCE IN FY23.
Mark Wilson | Chief Financial Officer and Company Secretary A pleasing full-year result saw the Group report Underlying EBITDA of $1.8 billion, up 71 per cent compared to the prior year. Operating cash flow of $1.4 billion was up $1.1 billion on the prior year, underpinned by extremely strong conversion of our profits into cash. Total revenue of $4.8 billion was up 40 per cent on the prior year while Return on Invested Capital (ROIC) of 6.7 per cent was impacted by impairments on iron ore assets and continued significant investment in world-class MinRes projects. This investment is being made in assets with long lives and strong economic fundamentals, which are expected to generate strong future cash flows for the Group. These include the successful Mt Marion lithium plant expansion, preliminary construction of the Onslow Iron project and continued investment in our Energy business which is currently focused on natural gas exploration in the Perth Basin. In FY23 our Lithium business delivered record earnings of $1.3 billion, driven by increased product volumes and strong commodity prices in the first half. The Wodgina ramp-up continued in earnest, with two trains operational and three trains now commissioned, resulting in 143kdmt of spodumene concentrate (SC6 equivalent) shipped in the financial year. We also delivered maiden earnings from lithium battery chemicals produced from Wodgina spodumene, with 7.3kt sold. The Mt Marion project shipped 149kt of spodumene concentrate (SC6 equivalent) during the year and is well positioned to further
18 I MINERAL RESOURCES LIMITED 2023 ANNUAL REPORT
strengthen production output in coming years and beyond. Plant expansion and commissioning were completed in line with budget, although delayed due to problems in the supply chain. In Iron Ore, we delivered stronger earnings on the back of improved achieved prices from lower product discounts and the reintroduction of lump product in the Yilgarn. The outlook for iron ore prices, however, weakened and at the end of the year we booked a $552 million after tax impairment charge on our operations at Wonmunna and Iron Valley. These operations are expected to continue to generate earnings in FY24 and beyond. Mining Services remains the heartbeat of our company and again played an instrumental role supporting MinRes operations and external client projects. This area of our business delivered Underlying EBITDA of $484 million and production volumes of 248Mt, a reduction of approximately 10 per cent on the previous year’s record volumes and influenced by the timing of new contract awards. As is the case with the broader industry, MinRes was exposed over the year to considerable cost pressures throughout all of its operations, impacting the cost of labour, plant and equipment, and diesel. The past 12 months have delivered solid performances across all areas of our business and our balance sheet remains in a strong position to support MinRes’ continuing investment in long life assets that will deliver transformational growth. Mark Wilson Chief Financial Officer and Company Secretary