The Flight Centre Travel Group Ltd (ASX: FLT) share price is down 1.39% during early afternoon trade on Tuesday.

Flight Centre shares closed yesterday trading for $17.24 each and are currently trading for $17.00.

With the Flight Centre share price down 4.8% over the past five days, is it a buy ahead of Thursday’s 2022 fiscal year earnings report?

FY 2022 earnings expected to remain negative

While earnings are expected to remain deep in the red for FY 2022, much of those pending results are likely already reflected in the Flight Centre share price.

The company released a trading update on 25 July, revealing it expects an earnings before income, taxes, depreciation, and amortisation (EBITDA) loss in the range of $180 million and $190 million for FY 2022.

While that’s still a hefty loss, it’s a big step up from the $337.9 million EBITDA loss posted in FY 2021.

According to Flight Centre, the improved outlook came from a much stronger second half.

Flight Centre share price could get a lift from travel rebound

While travel numbers remain below their pre-pandemic levels, travellers are returning at a rapid pace.

That could offer a boost to the Flight Centre share price in the wake of its FY 2022 results, which would make now a good time for investors to consider adding some of the stock to their portfolios.

According to Felicity Burke, consulting general manager at Flight Centre’s FCM Consulting (courtesy of The Australian):

We’re seeing an upward tick in aviation globally with the second quarter showing a steady monthly growth in seats offered, down 23% when compared to the same time-period pre-COVID.

As demand continues to increase across the world, we can now forecast that for the calendar year ending 2022, global seat availability will be back to 85% of pre-COVID levels, a bounce back that signifies the pent-up demand for people wanting to travel for both business and leisure.

Domestic air travel is expected to rebound to 83% of pre-COVID levels for the full 2022 year.

Flight Centre share price snapshot

Despite a big retrace since early May, the Flight Centre share price remains up 20% so far in 2022. That compares to a year-to-date loss of 8% posted by the S&P/ASX 200 Index (ASX: XJO).

The post Is the Flight Centre share price a buy ahead of Thursday’s FY 2022 earnings report? appeared first on The Motley Fool Australia.

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• Pilbara Minerals share price charges higher on strong FY22 result
• Nanosonics share price lifts despite FY22 profit tumbling 57%
• Hub24 share price slumps despite dividend doubling on record growth
• 5 things to watch on the ASX 200 on Tuesday

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

In July, inflation slowed from 9.1% to 8.5%, which offered some badly needed relief to the American consumer. Additionally, the labor market added over 500,000 jobs while maintaining an unemployment rate of just 3.5%.

If a recession is underway, someone forgot to tell the economy.

With the recent positive news, you might be wondering: Is now a good time to buy stocks? The truth is, if you’re a long-term investor, it’s always a good time to put money in the stock market. And while I personally think this is a great entry point for investors, there are a few things you should consider before investing your money.

Do you have an emergency fund?

An emergency fundis a cash reserve you can fall back on in case of unforeseen circumstances. Financial advisors typically recommend you hold enough cash to cover three to six months of expenses before investing, but it really depends on your personal risk tolerance.

If you need eight months of expenses saved up in order to sleep at night, then that’s what you should have in your emergency fund before you put your capital to work.

Will you need the money in the next three to five years?

Another thing to consider before investing your hard-earned money is when you’ll need that cash again. Ideally, you shouldn’t invest money that you anticipate needing in the next three to five years, preferably longer.

Obviously, you can’t predict the future (hence the emergency fund), but if for example, you know you are planning to buy a house or sending your kids to college in the next few years, you should not invest that money.

The market is unpredictable, so investing capital you will need in the near future can be a recipe for disaster.

Do you have high-interest debt?

Investing your savings while simultaneously paying off high-interest debt such as credit card debt is sort of like swimming in a riptide. It’s a whole lot of effort for very little progress.

If the S&P 500 returns on average 10% annually, but the interest on your credit card balance is 18%, it makes more financial sense to pay off your debt first instead of buying stocks.

This is not a universal rule, but if the interest rate on your debt is higher than your anticipated rate of return, you should pay off the debt before investing.

Have you educated yourself about investing?

The last thing to consider is if you’ve spent the time to understand the stock market before diving in. Fear of missing out (FOMO) can often cause stock market newcomers to rush into positions before they really understand the mechanics of the market and companies they’re investing in.

Horror stories of beginners accumulating huge margin debts or losing years of savings due to a lack of knowledge are all too common, so you want to be sure you understand the basics before buying your first shares.

Fortunately, there are investment vehicles such as low-cost exchange-traded fund (ETF)s, which require less research to understand. The beauty of the ETFs is a complete amateur can go from knowing nothing about investing to owning a piece of the best companies in the U.S. by buying an ETF such as the Vanguard 500 Index Fund ETF, all in a span of 30 minutes or so.

And despite numerous recessions, natural disasters, and the endless pessimism from the financial media, the stock market has continued to reward patient long-term investors:

Data by YCharts.

The bigger risk is actually not investing.

According to a study from Bank of America, the return of the S&P 500 between 1930 and 2020 was nearly 18,000%. But if you removed the 10 best trading days from each decade in that period, the return falls to just 28%. That means investors are better off holding on long term rather than jumping in and out of the market.

Net buyers of stocks are the ultimate winners

The undefeated stock market strategy is to simply be a net buyer of great companies regardless of market conditions.

Don’t believe me? Just ask the greatest investor of all time, Warren Buffett.

At a Berkshire Hathaway (NYSE: BRK-B) annual meeting in April, Buffett said:

I don’t think we’ve [referring to Vice Chairman Charlie Munger] ever made a decision where either one of us has either said or been thinking: ‘We should buy or sell based on what the market is going to do.’

Buffett understands that if you hold great companies long enough, the risk declines over time. According to MSCI, the probability of positive returns on an investment in the S&P 500 that’s held for at least 10 years is about 95%.

Whether you plan to buy a basket of diversified stocks or purely low-cost index funds, now remains a great opportunity to invest in the market to build toward financial independence.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Is this really the right time to invest in the stock market? appeared first on The Motley Fool Australia.

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Bank of America is an advertising partner of The Ascent, a Motley Fool company. Mark Blank has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Berkshire Hathaway (B shares). The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), short January 2023 $200 puts on Berkshire Hathaway (B shares), and short January 2023 $265 calls on Berkshire Hathaway (B shares). The Motley Fool Australia has recommended Berkshire Hathaway (B shares). The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Arafura Resources Ltd (ASX: ARU) share price is flying higher in early afternoon trading on Tuesday.

There’s been no news from the rare earths explorer today but yesterday the company published its options prospectus for a placement of new fully paid ordinary shares.

Shares of the mineral exploration company currently trade for 30 cents apiece, up 5.26%.

Let’s go over the details of the company’s prospectus.

Arafura Resources options prospectus

Arafura has released details for 78,389,607 exercisable options, exclusively for investors who participate in its share placement program, announced on 12 August.

One free attachment option will be issued to placement investors for every two shares subscribed under the placement program. Each option has an exercise price of 34 cents per share on or before 18 months from the date of issue.

The company notes that no funds will be raised directly through the issue of new options but, if all of them are exercised, the company will receive $26.65 million before costs. Funds from the options will reportedly be used for developing the company’s Nolans project located in Australia’s Northern Territory and for general working capital purposes.

If all the options are issued, the company expects to add listed options as an additional class of securities in the company and to increase the number of options on issue by 78,389,607.

A total of 156.7 million new ordinary shares were issued to placement investors for a total of $41.5 million earlier this month. Those shares had an issue price of 26.5 cents each.

Arafura share price snapshot

The Arafura Resources share price is currently up 45% year to date. Meanwhile, the S&P/ASX 200 Materials Index (ASX: XMJ) is down 1.41% over the same period.

The company’s current market capitalisation is $526 million.

The post Why is the Arafura share price leaping 5% today? appeared first on The Motley Fool Australia.

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• 3 ASX mining shares primed for an ‘exponential’ energy transition: expert
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• Why has the Arafura share price jumped 25% so far in July?

Motley Fool contributor Matthew Farley has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Materials Index (ASX: XMJ) has gained 5.8% in August, but one ASX lithium share has soared far higher.

The Ragusa Minerals Ltd (ASX: RAS) share price has soared 293% from 7.5 cents at market open on August 1 to the current share price of 29.5 cents.

So why have investors been buying up Ragusa Minerals shares?

Why has this ASX lithium share soared?

This ASX lithium share has soared on the back of news out of its Northern Territory Lithium Project. Lithium is an essential component of electric vehicle (EV) batteries.

Ragusa is exploring lithium in the Litchfield Pegmatite Belt in the Northern Territory. The company also has a 100% interest in the Burracoppin Halloysite Project in Western Australia. Further, Ragusa wholly owns the Lonely Mine Gold Project in Zimbabwe and the Monte Cristo Gold Project in Alaska.

Since market close on 10 August, the Ragusa share price has soared 180% alone. On 11 August, Ragusa revealed historical exploration has affirmed high grade lithium perspectivity at the NT project.

This includes 8.03% Li2O3 and 7.25% Li2O6.

Commenting on this news, chairperson Jerko Zuvela said:

We have a significant opportunity to utilise our exploration and development experience to rapidly progress our NT Lithium Project and realise the massive upside value potential in a Tier 1 jurisdiction close to major infrastructure at a time of record lithium prices

Meanwhile, the outlook for the lithium price could also be providing Ragusa with a boost. In a note yesterday, analysts at Macquarie boosted the price target on multiple ASX lithium shares and upgrade their outlook on lithium prices. Macquarie said:

We upgrade medium-term lithium carbonate and hydroxide price outlook and expect prices to stay higher for longer. We also lift our regional lithium price forecasts to match the pricing strength in China.

Finally, in news today, Ragusa has received a price query from the ASX. The company highlighted it is in compliance with listing rules while noting the 11 August news. Ragusa said:

Given the results announced on this date, with drilling preparation works progressing, there has been a significant level of interest of upcoming works and results from the
project.

Ragusa share price recap

The Ragusa Minerals share price has exploded 275% in a year, while it has risen 242% in the year to date.

In contrast, the ASX 200 Materials Index has climbed 0.34% in a year, while it has lost 1.43% year to date.

Ragusa has market capitalisation of about $34.4 million based on the current share price.

The post Guess which obscure ASX lithium share has gained 293% so far in August appeared first on The Motley Fool Australia.

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• Why has the Ragusa Minerals share price exploded 136% in a week?
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Motley Fool contributor Monica O’Shea has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Santos Ltd (ASX: STO) share price is up more than 2% so far on Tuesday.

The S&P/ASX 200 Index (ASX: XJO) energy giant is currently trading for $7.55 per share.

Santos shares are now up 9% since the company released its half-year results on 17 August.

And what results they were!

Santos reported revenues of US$3.77 billion, an 85% leap over the prior corresponding period. Underlying net profit after tax (NPAT) leapt 300% to US$1.27 billion. And management declared an interim dividend of 7.6 US cents, up 38%.

So, following on those monster profits, is the Santos share price a buy?

Strong earnings, cash flow and dividends

For some insight into that question, we defer to Michael Slack, head of research at Martin Currie.

Asked by Livewire whether the Santos share price was a buy on the back of those strong results, Slack said it was a definitive buy.

According to Slack:

We see over 20% valuation upside in this stock, as Santos’ strong cashflow generation comes to fruition and the growth projects get appreciated by the market. So, any form of weakness is a good opportunity to take advantage of.

Slack has a bullish outlook for the Santos share price and the broader energy sector in the 2023 financial year.

The outlook is “very strong, particularly for LNG,” he said.

Slack added:

Europe is displacing 100 million tonnes of Russian pipeline gas into the EU, with LNG. That’s 25% of the existing supply and you can’t just turn on LNG supply overnight. So LNG prices in particular are likely to be strongly supported for a long period until you get mobilisation of new capacity. And that could take 4-5 years.

Santos itself is 70% gas revenue and is a low-cost producer. Very strong earnings, very strong cash flow to fund investments, and more dividends and returns to shareholders.

Slack noted that one obvious risk is the oil price.

“However, the oil market is structurally undersupplied, hasn’t been invested in for many years, and is struggling to keep up with the demand that is still impacted by COVID,” he said.

“We would say that the fundamentals of the oil market are still strong and will remain strong. The fundamentals of the gas market are even stronger.”

Santos share price snapshot

The Santos share price is up 14% so far in 2022. That compares to a year-to-date loss of 8% posted by the ASX 200.

The post Is the Santos share price a buy following the company’s monster profit? appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The A2 Milk Co Ltd (ASX: A2M) share price has slipped by 10% since the company reported its interim results in February.

Its full-year results are due next week. They’ll come at a time the infant formula and fresh milk company has been through a horrid year impacted by challenging market conditions.

At the time of writing, A2 Milk shares are down 0.62% to $4.78 apiece.

Below, we take a closer look to see if investors can learn anything from the company’s last earnings season.

What happened in the first half of FY 2022?

When the company delivered its half-year results on 21 February, investors sent up the A2 Milk share price by 11.1%.

The company recorded double-digit losses across key metrics except for group revenue, but the market shrugged off the poor performance.

Instead, it focused on the near-term future and what changes were being made to get the business back on track.

A2 Milk’s managing director and CEO David Bortolussi commented:

Despite challenging market conditions in China and COVID-19 volatility, we are making good progress stabilising the business. The growth strategy we announced in October last year to respond to a rapidly changing China market has been completed and implementation is underway with good early progress across a range of initiatives.

We remain confident in the long-term China infant milk formula market, and we are growing share in our China label business in-store and online with strong consumer offtake and share growth. The actions we took to address excess infant milk formula inventory last year are proving effective, and we are seeing improvements in English label channel inventory levels, market pricing and product freshness.

After the results were released, A2 Milk shares travelled sideways for the following month before heading south.

The share hit a multi-year low of $3.90 on 10 May on the back of extreme volatility impacting the ASX.

Nonetheless, A2 Milk shares rebounded to a four-month high of $5.22 on 4 August when a media report suggested the company was nearing Food and Drug Agency approval to supply infant formula to the United States.

Since then, the share is hovering just below the $5 mark as investors eagerly await the release of the company’s full-year results.

This is expected to occur on Monday 29 August.

A2 Milk share price snapshot

Throughout 2022, the A2 Milk share price has fallen 12% as the company navigates its way through changing market dynamics.

For context, the S&P/ASX 200 Consumer Discretionary (ASX: XDJ) is down 17% over the same period.

A2 Milk has a price-to-earnings (P/E) ratio of 204.08 and commands a market capitalisation of roughly $3.69 billion.

The post How did the A2 Milk share price respond last time the company reported? appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has positions in A2 Milk. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended A2 Milk. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Reject Shop Ltd (ASX: TRS) share price is tumbling on Tuesday after the ASX retailer reported its full-year earnings for FY2022. Reject Shop shares are currently trading at $4.30 each after opening at $4.20 this morning, down a nasty 4.66% from the $4.51 the company closed at yesterday.

The Reject Shop share price tanks on lacklustre results

• Sales came in at $788.2 million, a rise of 1.2% over the prior corresponding period (pcp)
• Statutory net profit after tax (NPAT) of $7.9 million, down 5% from the pcp
• Normalised NPAT of $4.9 million, down 24.1% on pcp
• Normalised earnings before interest and tax (EBIT) of $6.9 million, down 26.7% on pcp
• Costs of doing business rose 1.3%
• No dividend declared for FY22.

Although sales officially came in at $788.2 million, a rise of 1.2% over the prior corresponding period, this metric includes a 53rd week of the year. Excluding this extra week, sales would have been $774.6 million, a slip of 0.5% over the pcp. Comparable store sales were down 2.2% over the prior period.

Meanwhile, The Reject Shop has announced an on-market share buyback scheme of “up to $10 million”. This is partly in lieu of a dividend for FY2022. The buyback will commence next month. It will represent the repurchase of “approximately 2.2 million shares or approximately 5.8% of issued capital”. 

What else happened in FY2022?

Reject Shop management noted that the Omicron outbreak “adversely impacted store foot traffic in the lead up to the key Christmas trading period” of FY2022, with the company noting that sales across December and January were negatively affected. 

However, sales between March and June were reportedly far more positive following this period. 

What did management say?

Here’s some of what Paul Bishop, the CEO of The Reject Shop, had to say on these results:

FY22 has been a challenging year for our customers, our team and our business…

The discount variety sector has an important role to play in helping Australians navigate this difficult economic time and, as Australia’s largest discount variety retailer, I believe The Reject Shop can have a meaningful impact by offering our customers both branded consumables as well as exciting general merchandise at a low price.

I look forward to The Reject Shop delivering an improved and differentiated merchandise offer that strongly appeals to customers, which is expected to deliver comparable sales growth and create value for all shareholders.

What’s next?

The Reject Shop has declined to provide any guidance for the 2023 financial year today. However, the company highlighted its plans to open 25 new stores this financial year, as well as close between five and ten underperforming stores.

In addition to these plans, management stated that its focus in FY2023 will be “on generating comparable store sales growth, which is expected to be supported by an improved product offering with more great deals on branded consumables as well as new and exciting general merchandise”.

It is also focusing on “managing the impact of inflation on gross profit margin and operating costs”.

Reject Shop share price snapshot

The Reject Shop shares have been struggling in recent months. With today’s falls, the company remains down more than 40% year to date in 2022 so far. It’s also down 25% over the past 12 months.

At the current Reject Shop share price, the company has a market capitalisation of $163.3 million.

The post Reject Shop share price dips 5% despite share buyback appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://www.fool.com.au/2022/08/23/reject-shop-share-price-dips-5-despite-share-buyback/

The Ansell Limited (ASX: ANN) share price is taking off following the release of the company’s full-year earnings.

The S&P/ASX 200 Index (ASX: XJO) stock has continued on an upwards trajectory after opening 1.5% higher at $25.52.

At the time of writing, the Ansell share price is $27.57, 9.67% higher than its previous close.

Let’s take a closer look at today’s news from the personal protection and safety solutions provider.

Ansell share price rockets 10% on earnings

As The Motley Fool Australia reported earlier, Ansell posted US$1.95 billion of revenue and US$158.7 million of operating profit for financial year 2022.

Those figures mark respective year-on-year declines of 3.7% and 35.7%, mainly due to waning demand born from COVID-19.

Its earnings per share (EPS), meanwhile, came in within guidance at US$1.252 per share. That’s bolstered to US$1.386 when adjusted for costs arising from the company’s exit of Russia. Its decision to abandon operations in the nation brought a 13.4 US cent impact to its EPS.

Such a result has seemingly impressed the market. It’s bid the Ansell share price to a multi-week high on the back of the company’s announcement. The results also appear to have pricked the ears of experts.

Macquarie’s David Bailey was quoted by The Australian as saying the company’s financial year 2022 earnings embody “solid underlying trends”.

The publication said the company’s statutory result was in line with expectations, while its adjusted earnings were ahead. The expert continued, courtesy of The Oz:

For [financial year 2023], we see commentary ex-Russia and [foreign exchange] as highlighting improved trends and a basis for growth into [financial year 2024].

Ansell posted guidance of between US$1.15 and US$1.35 of EPS for financial year 2023.

Today’s gains included, the Ansell share price is 16% lower than it was at the start of 2022. It has also fallen 31% since this time last year.

The post Ansell share price surges 10% as full-year revenue comes in at US$1.9b appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Ansell Ltd. and Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The market might be under pressure today but there’s one ASX mining share that’s surging ahead this morning on positive drill results.

The outperformer is the American West Metals Ltd (ASX: AW1) share price. It jumped 48% to a high of 18.5 cents this morning, its highest since May, before retreating to trade at 15.5 cents at the time of writing. That’s still a 24% gain on yesterday’s closing price.

In contrast, the All Ordinaries Index (ASX: XAO) is 0.52% lower as the August reporting season rolls on.

The small ASX mining share in the spotlight

American West is stealing some of the spotlight today after it announced a major copper discovery at its Storm Project in Canada.

Its drill hole (ST22-10) intersected over 68 metres of stratiform copper sulphide mineralisation from a 277-metre downhole.

This is significant, according to the small cap ASX mining share. It noted that the discovery is associated with an 800m by 300m electromagnetic (EM) plate, with six other similar large EM plates yet to be tested.

Details of the drilling result from this ASX mining share

The mineralisation is interpreted to be stratiform and is hosted within a vuggy, bituminous, and fossiliferous carbonate unit.

This is consistent with the typical mineralisation model for sedimentary copper systems. This style of permeable host rocks could form chemical traps for the deposition of copper-rich fluids.

The ASX mineral explorer was quick to point out that many other large copper systems have similar geology.

What American West is saying

The managing director of American West Dave O’Neill said:

This is a game changing discovery at the Storm Copper Project. Exploration drilling has intersected stratiform copper sulphide mineralisation at depth which supports our geological assumptions that there is a major copper system lying below the high-grade near surface mineralisation.

The new copper mineralisation is associated with a large EM plate that is one of six untested plates, most of which are located in highly prospective positions – below or adjacent to the known high-grade copper prospects and fault system

The American West share price snapshot

The surge in the American West share price today pushes the ASX mining share to a gain of more than 10% for the year.

That’s well above the All Ordinaries, which has shed around 7% over the same period, and the S&P/ASX 300 Metal & Mining index, which inched up 2.1%.

Other ASX copper miners have turned in mixed performances. The Sandfire Resources Ltd (ASX: SFR) share price has fallen 15%, while the OZ Minerals Limited (ASX: OZL) share price is up 21% in the past 12 months.

American West is a junior explorer with projects in Canada and in Utah, USA.

The post Guess which ASX mining share just exploded 48% on a major copper discovery appeared first on The Motley Fool Australia.

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Motley Fool contributor Brendon Lau has positions in OZ Minerals Limited and Sandfire Resources NL. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Pilbara Minerals Ltd (ASX: PLS) share price is currently being charged up. At the time of writing, it is climbing 3.31% to $3.275 after the company released its FY22 result this morning.

This comes at a time when the S&P/ASX 200 Index (ASX: XJO) is down by 0.58%, so the ASX lithium share is materially outperforming the index today.

Firstly, let’s have a look at what the company said about FY23 because investors often like to look forward to what could happen in the next 12 months and beyond.

Pilbara Minerals FY23 guidance

In terms of production, Pilbara Minerals said that its spodumene concentrate for the 2023 financial year is expected to be between 540,000 and 580,000 dry metric tonnes (dmt). The Pilgan plant capacity is 360,000 tonnes to 380,000 tonnes per annum and the Ngungaju plant capacity is between 180,000 tonnes to 200,000 tonnes after a ramp-up in the quarter for the three months to September 2022.

The ASX lithium share also gave guidance about its unit operating costs, which are expected to be between A$635 per dmt and A$700 per dmt.

Pilbara Minerals said that costs are expected to be higher during FY23 due to elevated strip ratios and the ramp-up of the Ngungaju plant. It came to the projected cost range because of the uncertain environment, including the impact of COVID-19, labour shortages in the WA mining sector, supply chain disruptions and general inflationary cost pressures.

Beyond FY23, costs are “likely to decrease” once strip ratios moderate, production capacity is achieved at Ngungaju, plant throughput increases, better utilisation rates are achieved and synergies are won from the combined Pilgangoora operations.

Strong market conditions

One of the key factors that could influence the Pilbara Minerals share price is the performance of the lithium price, because it’s a commodity business.

Pilbara Minerals said lithium pricing remains “strong”, which places the company in “prime position to capitalise on current market conditions, including through the sale of spodumene concentrate” from the Ngungaju plant.

Despite projections of a big increase in supply of lithium over the next two decades, the deficit between supply and demand is expected to rise to 2040, which is likely to have “pricing implications”. The deficit is predicted to be equivalent to around 18 Pilgangooras.

FY22 result announcement

In terms of the 2022 financial year, Pilbara Minerals said its shipments of spodumene concentrate grew 28%, revenue soared 577% to approximately $1.2 billion and it generated a statutory net profit after tax (NPAT) of $561.8 million.

Pilbara Minerals’ managing director and CEO Dale Henderson said:

Having recently approved the expansion to grow production by a further 100,000 tonnes per annum, to a combined 640,000 tonnes to 680,000 tonnes per annum, and with the company now progressing towards a final investment decision to expand production to 1 million tonnes per annum, Pilbara Minerals commences FY23 in an exceptionally strong position.

The business is in an enviable position, supplying product into a burgeoning growth market with a clear pathway for further production growth off a performing operating base. Further, chemicals participation with our downstream JV with POSCO and our midstream project provides another extension of value creation for our shareholders.

Pilbara Minerals share price snapshot

Over the last month, Pilbara Minerals shares have risen almost 30%. They are up 46% over the past year but are down 7% this year to date.

The post Pilbara Minerals share price charges higher on strong FY22 result appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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