Lynas Rare Earths (ASX: LYC) has released its financial results for the first half of FY25, showing a solid increase in production and sales but facing profitability headwinds due to weaker rare earth prices.
The company reported a net profit after tax of $5.9 million, down from $39.5 million in the prior corresponding period, despite revenue climbing to $254.3 million (up from $234.8 million). The decline in profit largely reflects the drop in NdPr prices, which fell from US$56/kg to US$49/kg over the year.
Production and Expansion on Track
Lynas ramped up its NdPr production by 22% to 2,969 tonnes, driving a 23% increase in sales volumes. However, the cost of sales jumped 29% to $205.3 million, impacted by increased sales, a $5 million inventory write-down, and costs associated with bringing new facilities online.
The company continued investing heavily in expansion projects, with $267 million spent on major projects. Key milestones included:
- Commissioning Stage 1 of the Mt Weld Expansion
- Ramping up production at the Kalgoorlie Rare Earths Processing Facility
- Officially opening the Kalgoorlie Facility
Meanwhile, at Lynas Malaysia, major progress was made on the new Dy and Tb separation circuit, with commissioning expected mid-2025.
A Long-Term Growth Story
Despite short-term price pressures, Lynas remains confident in the long-term demand for rare earths. The recent update to the Mt Weld Mineral Resource and Reserve underpins a 20+ year mine life at a 12,000 tpa NdPr production target, reinforcing Lynas’ position as a key global supplier.
CEO Amanda Lacaze remains optimistic, highlighting that demand growth, potential regulatory shifts in China, and government-backed supply chain initiatives could support better market conditions. Lynas continues to prioritize high-value customers and products while navigating current pricing challenges.
With a strong balance sheet and a clear growth strategy, Lynas is positioning itself for a future where rare earths play an even bigger role in global supply chains.
