Despite 2018 being a major year for Mineral Resources Ltd [ASX:MIN], shares are now trading lower upon the release of the company’s half year results.
Mineral resources reported a disappointing first half profit result, with uncertainty in its outlook leading into the second half of 2019.
Mineral Resources’ share price was at $16.14 earlier today, down 9.12%. The current share price is $17.35, still lower than yesterday’s price.
However, a drop in share price after a big announcement such as a company’s disappointing half year results, naturally makes a stock more sensitive to price shifts.
That’s why it’s good to get the opinion of someone who knows bit about the sector. Take a look at Money Morning contributor, Jason Stevenson, and his top 10 mining stocks that he believes you should watch in 2019. Read more about it here for free.
Delays and discounts drive down Mineral Resources’ share price
This morning, MIN announced a profit loss of 92% in the first half, to $13 million. This carried on to revenue, which experienced a 35% loss to $555 million.
MIN put the weakening value down to the hold up of direct shipping ore activities from the Wodgina lithium project in Pilbara, delays in the increase of its Spodumene plant and MIN’s higher expenditure — which increased by 598% to $494 million — that was spent in developing both its Wodgina lithium and Mt Marion lithium projects.
Mineral Resources share price 2019 outlook
Chris Ellison, founding shareholder, described 2018 as the most significant year in the company’s history.
‘The financial results for the first half of FY19 reflect our strategic decision to invest in a number of longer term growth projects,’ he said.
‘These projects will assist us maximise the value of our lithium ore bodies while the infrastructure and innovation initiatives we have been developing over the past three to five years will provide us with additional, industry changing mining services capability.
‘Together, these projects will create long-term shareholder value through the development of our world-class resources assets and increased annuity style earnings from enhanced mining services offerings.’
When it comes to a stock such as Mineral Resources, growth does require expenditure so it might take a little time before we see its shares start to trade favourably again.
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