Lynas Rare Earths (ASX:LYC) weathered the global rare earths market downturn and still managed to report a profit, albeit significantly lower than the previous year. Like its lithium peer, Pilbara Minerals, Lynas demonstrated resilience in the face of declining demand for these exotic minerals.

Both companies experienced reduced revenue and earnings due to weaker demand from China and falling global prices for raw materials. Despite these challenges, Pilbara reported a solid profit by increasing production and shipments of spodumene.

Lynas recorded a net profit after tax of $84.5 million, down 72.8% from FY23. Revenue fell 37.3% to $463.3 million, and EBITDA slumped 65% to $132.1 million. Production of neodymium and praseodymium (NdPr) decreased by 8% due to a two-month shutdown at the Malaysian plant for upgrades.

The average China domestic price of NdPr dropped 27% from June 2023 to June 2024. Lynas's average selling price improved towards the end of the financial year, particularly for heavy rare earths. Future market price trends for NdPr will depend on end product demand, especially in the automotive industry. Prices for lanthanum (La) and cerium (Ce) remain low, and Lynas has reduced production and sales of these materials to optimise cost performance.

Lynas CEO Amanda Lacaze emphasised the company's experience in weathering market price volatility and its commitment to a growing global rare earths supply chain. The company's cash balance at balance date was $A524 billion, down from $1.011 billion a year earlier due to investments in a new plant at Kalgoorlie, a revamp at the Malaysian plant, and expansion of the Mount Weld mining operation.

Despite the overall gloomy outlook, Lynas's shares rose by around 3% yesterday.