IGO Q4 2025 presentation: EBITDA jumps 83% despite lithium market headwinds

Introduction & Market Context

IGO Limited (ASX:IGO) presented its fourth quarter 2025 results on July 30, highlighting operational improvements at its Nova nickel operation while continuing to face challenges at its Kwinana lithium hydroxide refinery. The company reported an 83% increase in underlying EBITDA to A$62 million compared to the previous quarter, demonstrating resilience amid persistent headwinds in the lithium market.

The results presentation revealed a company navigating a complex operational landscape, with strong performance from its nickel business offsetting continued underperformance in its downstream lithium processing operations. IGO maintained a solid balance sheet with A$280 million in cash, positioning the company to weather ongoing market volatility.

Quarterly Performance Highlights

IGO reported significant safety improvements across its operations, with the three-month Total (EPA:TTEF) Recordable Injury Frequency Rate (TRIFR) decreasing to 5.1 from 9.9 in the previous quarter. The company attributed this progress to sustained effort and more visible safety leadership, resulting in an 80+ day injury-free period.

As shown in the following safety performance chart:

The Greenbushes lithium operation, IGO’s flagship asset, maintained stable production despite weather challenges. The operation produced 340 tonnes of spodumene concentrate, virtually unchanged from 341 tonnes in the previous quarter, while achieving a robust 60% EBITDA margin. Sales increased 12% to 412 tonnes as delayed shipments from the prior quarter were completed.

The detailed Greenbushes performance metrics demonstrate the operation’s resilience:

The Nova nickel operation emerged as a bright spot, with nickel production increasing 22% to 5,107 tonnes and copper production rising 21% to 2,318 tonnes compared to the previous quarter. Cash costs per pound of payable nickel decreased significantly by 23% to A$3.97, reflecting the success of operational improvement initiatives. The company noted that Nova is expected to continue generating strong cash flow until the end of its mine life in December 2026.

The Nova performance data shows substantial quarter-over-quarter improvements:

In contrast, the Kwinana lithium hydroxide refinery continued to underperform, with plant utilization remaining low at 35% of nameplate capacity. While production increased 36% to 2,126 tonnes compared to the previous quarter, the company expressed "low confidence that plant will achieve sustained operational and cost improvement." IGO indicated it expects to record a further impairment of A$70-90 million, representing the full remaining asset balance relating to Train 1.

Detailed Financial Analysis

IGO’s financial performance showed improvement in the fourth quarter, with sales revenue increasing 15% to A$127 million, driven primarily by higher nickel and copper sales from Nova. The company’s share of net profit from Tianqi Lithium Energy Australia (TLEA) rose 21% to A$22 million.

Underlying EBITDA jumped 83% to A$62 million, reflecting stronger contributions from Nova (A$59 million) and a A$17 million fair value gain on IGO’s listed investment portfolio. However, underlying free cash flow decreased 95% to A$2 million, as the previous quarter had included a A$35 million income tax refund.

The financial results summary provides a comprehensive view of IGO’s performance:

The company maintained a strong balance sheet with net cash of A$280 million as of June 30, 2025, a slight decrease from A$284 million at the end of the previous quarter. This financial position provides IGO with flexibility to navigate ongoing market challenges while pursuing strategic initiatives.

Strategic Initiatives

IGO announced several strategic adjustments aimed at strengthening its position for the future. The company reduced its debt facility from A$720 million to A$300 million while extending the maturity date from July 2026 to July 2028. This restructuring aligns with IGO’s capital management framework, which targets a liquidity threshold of A$0.5 billion to support balance sheet strength and provide flexibility for growth.

The company also provided an update on the Forrestania transaction, with an amended agreement for Medallion Metals to acquire Forrestania Operations assets. Under this arrangement, IGO will retain the right to explore and mine nickel and lithium while receiving a 1.5% net smelter return on future gold production.

Board renewal is underway, with plans to reduce the board size and transition the Chair position. Three directors will retire prior to the Annual General Meeting, reflecting IGO’s commitment to governance evolution.

The corporate updates slide outlines these strategic initiatives:

Forward-Looking Statements

Looking ahead, IGO provided guidance for fiscal year 2026 across its operations. For Greenbushes, the company expects spodumene production of 1,500-1,650 kilotonnes with cash costs of A$310-360 per tonne and capital expenditure of A$575-675 million.

At Nova, which is approaching the end of its mine life, IGO guided for nickel production of 15,000-18,000 tonnes through December 2026, with cash costs of A$5.90-6.90 per pound of payable nickel.

For the challenged Kwinana operation, the company projected lithium hydroxide production of 9,000-11,000 tonnes with cash costs of A$16,000-20,000 per tonne and capital expenditure of A$75-85 million.

IGO emphasized its focus on exploration activities with strict commercial criteria, noting that further tenement rationalization is underway. The company’s exploration strategy aims to identify discoveries that can deliver meaningful value while maintaining capital discipline.

The company’s summary highlights its strategic priorities and operational focus:

IGO’s mixed quarterly results reflect the challenges of operating in the volatile battery materials market. While the Nova operation demonstrates operational excellence and the Greenbushes asset continues to generate strong margins, the persistent difficulties at Kwinana underscore the complexities of downstream lithium processing. With a solid balance sheet and strategic adjustments underway, IGO appears positioned to navigate the evolving market landscape while focusing on operational optimization and disciplined capital allocation.

Full presentation:

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