PLS Group (ASX:PLS), the Australian lithium producer formerly known as Pilbara Minerals, reported a sharp rise in revenue for the December quarter as commodity prices recovered. The company recorded second-quarter revenue of A$373 million ($262.89 million), a 73% increase from A$216 million in the same period a year earlier.
PLS attributed the revenue uplift in part to higher realised prices for its lithium product. The company logged average prices of $1,161 a tonne for its lithium in the quarter, a 50% increase from the September quarter.
Output also climbed year-on-year. PLS produced 208,000 metric tonnes of spodumene concentrate in the December quarter, up from 188,200 dry metric tonnes in the comparable period last year. The production figure, however, fell short of the analyst consensus of 212,000 metric tonnes.
Plant restart under consideration
PLS said it is considering reopening its Ngungaju plant in Western Australia and indicated it could do so within four months if it proceeds. The company pointed to strong interest for offtake volumes as a factor in the potential restart and said it expects to make a decision in the next quarter.
Costs and guidance
Unit operating costs on a free-on-board basis increased by 8% sequentially to A$585 per tonne. PLS cautioned that cost pressures are likely to persist through the remainder of the year because of the wet season, but maintained that full-year unit operating costs should remain within the companys guided range.
Despite the quarter-to-quarter cost increase and the production level below consensus, PLS kept its full-year forecast unchanged across all metrics.
Market backdrop and outlook
PLS framed its improved short-term outlook against a backdrop of rising demand for battery storage, which has supported a recovery in lithium prospects this year. The company noted that stronger market conditions offer the prospect of a faster recovery for producers who have been affected by an oversupply-driven price slump since late 2022.
Managements next steps include evaluating commercial interest for offtake and confirming whether the Ngungaju plant will be restarted, with a formal decision expected in the coming quarter.