Pilbara Minerals shares race higher on strong quarterly update

Pilbara Minerals Ltd (ASX: PLS) shares are pushing higher on Wednesday morning.

At the time of writing, the lithium miner's shares are up 3.5% to $2.36.

This follows the release of the company's second quarter update before the market open.

Pilbara Minerals shares higher on update

For the three months ended 31 December, Pilbara Minerals reported a 14% quarter on quarter decline in production to 188.2k dry metric tonnes (dmt).

This reflects the successful transition to the P850 operating model with the Ngungaju plant being placed into care and maintenance (C&M) and planned downtime for the ramp-up of P680 Crushing and Sorting.

This production was achieved with a unit operating cost (FOB) of A$621 per dmt, which is up 2% since the first quarter. Unit costs were flat in US dollars.

Sales update

Pilbara Minerals revealed that its sales volumes were down 5% quarter on quarter to 204.1k dmt. However, with its realised price increasing 3% to US$700 per tonne, the company's revenue lifted 3% to A$216 million.

For the first half, revenue was down 44% on the prior corresponding period to A$426 million and its cash margin from operations was A$41 million.

As a result, the company ended the period with a cash balance of A$1.2 billion. This is down from A$2.1 billion a year ago. This includes a total first half cash outflow of $455 million driven by capex.

How does this compare to expectations?

The consensus estimate was for spodumene production of 181kt.

Whereas sales volumes were expected to be 183kt at a realised spodumene price of US$668 per tonne.

As you can see above, Pilbara Minerals has outperformed on these metrics. This may explain why its shares are lifting today.

Branding

Management notes that the company is going to change its branding when it completes the acquisition of Latin Resources (ASX: LRS). It advised:

Upon completion of the Latin Resources acquisition on 4 February 2025, Pilbara Minerals will evolve its external facing brand to better support the future direction of the Group and establish a naming approach that can accommodate future growth.

The brand update aims to improve alignment with the Group's evolution into a multi-asset global lithium producer. Going forward, Pilbara Minerals' external brand positioning and logo will transition to "PLS" which aligns with the existing ASX code and established market use. The planned transition will be incremental and focused on digital changes to minimise cost.

The post Pilbara Minerals shares race higher on strong quarterly update appeared first on The Motley Fool Australia.

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