Full Year 2026 Mineral Resources Limited Earnings Call Transcript
Key Points
- Record FY26 results with revenue of $6.5 billion and underlying EBITDA of $2.6 billion, marking the strongest financial year in company history.
- Strong balance sheet improvement with net debt reduced by $1.1 billion to $4.3 billion and leverage down from 5.9x to 1.7x, driven by organic cash flow.
- Mining Services delivered record EBITDA of $976 million, up 32%, with a high-quality, long-term contracted order book (70% over 15+ years) that is less exposed to commodity cycles.
- Lithium operations improved significantly, with Wodgina's FY27 sales volume guidance up 14-23% and FOB costs down 4-13%, positioning the company to capitalize on higher prices.
- Return to shareholder returns with a fully franked dividend of $0.83 per share, reflecting confidence in the balance sheet and a clear capital allocation framework.
- Onslow Iron is running beyond nameplate with new transhippers, and the company is exploring expansion opportunities, including a potential Train 4 at Wodgina and brownfield growth projects.
- FY27 CapEx guidance is elevated at $1.425 billion (gross), with sustaining capital of $815 million reflecting one-offs like elevated stripping at Mount Marion and fleet replacements.
- Onslow Iron FOB costs are expected to rise to $56/ton in FY27 from $52/ton, driven by cost escalation and higher diesel price assumptions.
- Mining Services margins are under pressure, with the company acknowledging it is 'getting tougher' to maintain the $2/ton margin as commissioning benefits wash out.
- The POSCO transaction, which will reduce ownership in Wodgina and Mount Marion to 35%, is still pending regulatory approvals, creating uncertainty and a discount to Street NAV.
- Pilbara Iron Ore (Central Pilbara) remains marginal in cash generation at current iron ore prices, with limited levers to improve economics if prices decline further.
- Autonomous road-train project at Onslow is progressing slower than expected, with full driverless deployment not yet achieved and cost savings of $60-70 million/year not yet realized.
(audio in progress) -- from the two cyclones that passed through earlier this year.
Lithium bounced back on higher prices and improved operational performance. At Wodgina, our investment in mine development has repositioned the operation on the cost curve and extended its production outlook significantly.
The work was done when conditions were difficult. And the benefit is now flowing through, with more to come. Importantly, strong cash flow has now returned our balance sheet to a healthy position (technical difficulty) -- to $4.3 billion. And our liquidity has more than doubled to $2.4 billion.
Today, the Board has declared a fully franked dividend of $0.83 per share, representing a 20% pay-out on underlying profit. This decision reflects the Board's confidence in the balance sheet and that MinRes is in great shape.
It also reflects a simple principle. When the company generates surplus cash, our shareholders should share in it.
Looking ahead, we enter FY27 with strong operational momentum after
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