IGO posts $955m loss in ‘disappointing’ FY25

Significant impairments and subdued product markets have driven a $955m full year net profit loss for IGO (ASX: IGO).

The FY25 results include IGO’s share of net loss in TLEA, including full impairment of the Kwinana refinery assets ($605m) and derecognition of deferred tax assets relating to Kwinana ($58m).

Additional impairments include $115m of exploration assets and a $58m increase in the company’s rehabilitation provisions for Nova, Cosmos and Forrestania.

The results reflect challenging conditions in key markets with average realised spodumene price down 64% and average realised nickel price down 10%.

Group revenue of $528m was down 37% from FY24 due to lower realised nickel prices and volumes from Nova and Forrestania and Cosmos assets transitioning to care and maintenance.

IGO managing director and chief executive Ivan Vella says the FY25 financial results are disappointing.

“Both challenging market conditions and asset impairments, as a result of a disciplined portfolio review, impacted our headline results,” he said.

“Some of these were difficult decisions, however our underlying business remains solid and we have a clear strategy for value and growth we are delivering on.

“The improvement in safety throughout the year has also been a key achievement and sets a positive foundation for FY26.

“In September 2024 IGO announced a refreshed strategy and pathway for growth that focuses on clean energy materials.

“In FY25, a number of significant decisions and achievements were made that deliver on this strategy, including supporting the life of mine optimisation work program at Greenbushes, recognising the long term viability of Kwinana lithium hydroxide refinery is challenged and implementing a new exploration business model, which is already delivering outcomes.”

Greenbushes saw FY25 spodumene production of 1479kt and unit production cash costs of $325/t. These both represented year-on-year improvements and were in line with IGO’s full year guidance.

The operation continued to deliver strong margins despite market conditions, with a full year earnings before interest, taxes, depreciation and amortisation (EBITDA) margin of 66% (FY24: 85%).

“The global lithium market was weak throughout FY25. Nevertheless, Greenbushes demonstrated it is a world class asset with an EBITDA margin of 66% and strong cash conversion,” Mr Vella said.

“We believe market fundamentals for lithium are positive and Greenbushes is well placed to capitalise.

“We are working with our partners to achieve its full potential including delivering CGP3 — the next phase of growth.”

The Nova operation generated revenue of $439m, 19% lower than the prior year as a result of lower nickel prices and sales volumes.

However, the operation saw significant performance uplift over the year, with a 31% improvement in nickel production in the second half of the year driven by operational improvements to address challenges associated with an end of operating life ore body.

Nova recorded full year production of 16,371t and nickel cash costs of $5.53/lb.

“We have clear priorities for FY26. These include our safety improvement programme, generating cash flow to the end of mine life at Nova, and supporting activities at Greenbushes as the team optimise this amazing asset,” Mr Vella said.

“We will also progress our growth pathway, via exploration, technology and strategic partnerships, as we write the next chapter in our story and celebrate the 25 years of IGO.”