The Mineral Resources Ltd (ASX: MIN) share price closed in the red on Thursday after its full-year result failed to impress investors despite reporting earnings before interest, tax, depreciation and amortisation (EBITDA) above its guidance range.
What were the Mineral Resources highlights?
Mineral Resources reported revenue down 7% on the prior corresponding period (pcp) to $1,512 million for the year ended 30 June 2019 while statutory EBITDA came in at $386 million, a drop of 33%.
Statutory net profit after tax (NPAT) plummeted 39% to $165 million as earnings per share (EPS) similarly tanked 40% to 87 cents per share (cps).
Even on an underlying basis, there wasn't a lot of good news for investors with EBITDA falling 14% on pcp to $433 million and underlying NPAT down 24% to $205 million.
Operating cash flow halved from FY18 numbers to $269 million while the company's capex spend rocketed 140% higher to $858 million in a big-spending year for the Aussie miner.
Management cited the decision to halt direct shipping ore (DSO) activities at its Wodgina Lithium Project and a temporary pause in mining activity in the Yilgarn region as the biggest drag on revenue compared to FY18.
While earnings were significantly lower, the Mineral Resources share price closed just 1.1% lower as investors appear buoyed by the potential for a full year of production in FY20 and a turnaround in global commodities.
Management also announced a fully-franked 31 cps dividend for shareholders, which brings the company's full-year payout to 44 cps, or a yield of 3.29% based on yesterday's $13.36 valuation.
Foolish takeaway
Yesterday's result is far from the best earnings report I've seen this August but the Aussie miners, in general, have struggled a little during the June 2019 quarter.
As mentioned, the potential return to full production in FY20 appears to have boosted shareholders hopes while a higher capex should hopefully expand operations and efficiency in the years ahead.
Overall, I wouldn't be buying Mineral Resources shares on the back of its full-year results and would prefer to consider a bigger name such as Telstra Corporation Ltd (ASX: TLS).
