Liontown Resources has recorded its first annual net profit, a turnaround the company attributes to firmer lithium prices in the second half of the year and higher output from its Kathleen Valley operation.
For the year, Liontown posted a net profit after tax of A$93 million, reversing a net loss of A$193 million in the prior year. On an underlying basis - which strips out one-off items - underlying net profit after tax reached A$14 million, reversing an underlying underlying loss of A$140 million in FY25.
Revenue for the year climbed to a record A$639 million from A$298 million a year earlier. The revenue lift was supported by a 35% increase in concentrate tonnes sold alongside a 75% rise in realised prices. Underlying EBITDA increased to A$147 million from A$20 million, while operating cash flow rose to A$182 million from A$1 million.
The company did not declare a dividend, explaining that management is concentrating on reinvesting cash into Kathleen Valley as the mine makes the transition to fully underground operations.
The swing to profit was underpinned by a A$94 million gross profit from operations compared with a A$144 million operational loss in the prior period. Liontown also recognised a A$113 million deferred tax asset for carried-forward tax losses.
Chief Executive Tony Ottaviano described the year as having "two very different halves," saying weak prices earlier in the year forced the company to exercise cost discipline before it resumed reinvestment once prices improved.
Management said the underground ramp-up remains on track for a 2.8 million-tonne-per-annum run rate by the end of FY27. The company stated it delivered on FY26 guidance and that a final investment decision on the Kathleen Valley expansion is due next month.
Summary
Liontown posted a net profit after tax of A$93 million, underpinned by record revenue and stronger realised lithium prices, while electing to reinvest rather than pay a dividend as Kathleen Valley prepares to move to full underground production.
Key points
- Net profit after tax of A$93 million for the year versus a A$193 million loss previously; underlying NPAT of A$14 million versus an underlying loss of A$140 million in FY25.
- Record revenue of A$639 million, driven by a 35% rise in concentrate tonnes sold and a 75% increase in realised prices; underlying EBITDA A$147 million and operating cash flow A$182 million.
- Management is prioritising reinvestment at Kathleen Valley as it transitions to underground operations; FID on the expansion is scheduled for next month.
Risks and uncertainties
- Price sensitivity - the company's turnaround was linked to a recovery in lithium prices, and earlier weak prices forced cost discipline.
- Execution and timing risk - the planned underground ramp-up and expansion require delivery on the timetable to reach a 2.8 million-tonne-per-annum run rate by end of FY27.
- Capital allocation choice - the decision to withhold dividends in favour of reinvestment concentrates capital risk on the success of the expansion strategy.