MGX Resources (MGX) H2 2024 earnings summary

Executive summary

• Delivered strong operating and financial performance in FY 2024, with high grade iron ore sales reaching 4.1 million wet metric tons at 65.3% Fe, up 36% year-over-year, generating just under AUD 668 million in revenue.

• Koolan Island operating cashflow surged to AUD 284 million, three times FY 2023, reflecting higher shipment volumes and improved operational performance.

• Net profit after tax was AUD 6.4 million, impacted by AUD 159.1 million in non-cash impairments and AUD 46 million in tax expenses, including derecognition of deferred tax assets.

• Cash and liquid investment reserves increased by AUD 280 million to AUD 442 million at year-end, excluding Fenix stake.

• Announced an on-market share buyback of up to 5% of issued shares, reflecting confidence in future cashflow generation and addressing undervaluation.

Financial highlights

• Sales revenue increased to AUD 667.7 million from AUD 450.6 million year-over-year, with sales of 4.1 million wet metric tons at 65.3% Fe.

• Gross profit rose to AUD 193.1 million from AUD 114.2 million year-over-year.

• Koolan Island generated AUD 284 million in cash flow and profit before tax and impairment doubled to AUD 211.6 million.

• Interest income grew to AUD 16.8 million, and other income to AUD 45.5 million, including a AUD 35.9 million gain from asset divestment.

• Unit cash operating costs before royalties averaged AUD 74 per ton FOB.

Outlook and guidance

• FY 2025 sales targeted at 2.7–3 million tons, lower than FY 2024, reflecting depleted stockpiles and transition to the eastern pit.

• Unit cash operating costs expected at AUD 95–100 per ton FOB in FY 2025, including capitalized mining costs.

• Mining activity transitioning to eastern areas of Koolan Main Pit, with stripping ratio expected to rise to 1.8:1 over the next 2–3 years.

• Shipping rates anticipated to rise through FY 2025 and into FY 2026–2027.

• Focus remains on maximizing cash flow from Koolan Island and seeking opportunistic resource investments.