By Rhiannon Hoyle
Lynas Rare Earths reported a 74% fall in first-half net profit, reflecting a sharp drop in prices for rare earths as China’s housing crisis curbs demand for the commodities.
The Australia-listed miner said it made a net profit of 39.5 million Australian dollars (US$25.9 million) in the six months through December, down from A$150.1 million in the same period a year earlier.
Earnings before interest, taxes, depreciation, amortization and treasury charges fell by 67% to A$62.6 million, while revenue was 37% lower at A$234.8 million.
Directors did not declare an interim dividend.
Lynas has been grappling with a pullback in prices for its rare earths due to low demand in China, particularly from makers of appliances such as air conditioners. Its core neodymium and praseodymium products are used in magnets for home appliances and consumer electronics, as well as wind turbines and electric vehicles.
The company has previously said it sees China’s economic recovery as the main factor that could influence a turnaround in prices.
Lynas reported an average selling price of A$35.5 a kilogram for the first half of fiscal 2024, down from A$52.50 a kilogram a year ago. Prices for its sales have also been weighed down recently by a change in its product mix, which has included a higher-than-usual proportion of lower-value materials.
Lynas also produced less than a year ago as it temporarily shut down its Malaysia plant for upgrades to capacity.
Lynas, which forecasts accelerating rare-earths demand in the years ahead, has been expanding its business. It has built a new processing facility in Australia and is working on plans for one in Texas. Earlier this month, the company said it has held confidential talks with New York-listed MP Materials about a possible deal, but that discussions are not ongoing.
Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com
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