$2.60 Target, page-52

Have been following the spodumene price daily (SC6 on SMM) for almost 3 months now. On September 11 it was 3175 USD and fell to 2860 USD by the last day of September. It fell over 26% in October finishing at 2110 USD. In November it fell a further 15% to end up at 1789 USD. So far in December it has fallen close to a further 10% to end up at 1615 USD tonight. That's close enough to a 50% fall in 3 months.

In Q1 Pilbara received an average of 2240 USD for it's 5.3% spodumene, that's a larger discount to the 6% price than a pro rata discount (multiply by 5.3, divide by 6) that one would usually apply.

Revenue for Q1 was $469 million AUD for 146400 dmt of 5.3% spodumene. From the Annual Report (p161) for FY23 costs and expenses were $850.580 million to produce 607500 tonnes of spodumene. That's right on $1400 per tonne. Assuming a similar level of expenses in Q1 FY24, EBITDA for Q1 would be 469 minus 204.96, so $264 million, take away some tax, leaves about $185 million, just over 6 cents a share of earnings for the first quarter. (This takes no account of interest, depreciation and amortization.)
Since the spodumene price has fallen 50% since halfway through September, and the end of Q2 is not too many days away, Q2 earnings are going to be quite a bit less than 6 cents a share, maybe about 10 cents for the half. Unless the spodumene price recovers quite a bit FY24 earnings are going to struggle to make 20 cents a share for the full financial year. Volumes in Q2, Q3 and Q4 are all expected to be higher than Q1 but not enough to offset the sharp fall in prices.

For comparison FY23 basic earnings were 79.91 cents per share.

Pilbara are an excellent company with top management operating their assets at close to 100% efficiency. The one thing they cannot control is the price of the product they sell.

Have been interested to follow the comments by many posters for PLS. Hope these comments generate some discussion of what their earnings for HY24 and FY24 might be. In the end its their earnings which will determine their share price going forward.