Four years after shipping the first spodumene concentrate from its Pilgangoora project in north-west WA, Pilbara Minerals has flagged it will pay an inaugural dividend for the 2022-23 financial year.
The announcement was made as the company disclosed a dividend policy, setting a payout ratio of between 20 per cent and 30 per cent of its free cash flow.
Booming lithium prices and rising production have Pilbara Minerals sitting on more than $1.37 billion of cash after romping to a $562 million annual profit for the year to June 30.
The company said on Wednesday its dividend policy balanced the payout of sustainable returns to its shareholders with the capital needed for the expansion of Pilgangoora, development of its South Korean processing joint venture with POSCO and the pursuit of other growth opportunities.
Chief executive Dale Henderson said that having used up all of the tax losses associated with the development of Pilgangoora, Pilbara Minerals would begin paying corporate tax in February.
“As a result, the company is expecting to apply the target dividend payout ratio of 20 per cent to 30 per cent of free cash flow for the first time to pay a fully franked dividend for the 2023 financial year,” Mr Henderson said.
He said sharply rising demand for lithium had “transformed the financial position of the company”.
“With this comes the opportunity to bolster the growth path for the business and provide improved long-term value return for our shareholders, many of whom have stayed the course through the ups and downs.”
