Perth-based Mineral Resources (ASX:MIN) has dropped its final dividend after reporting a surge in debt for the year to June and an 80% decline in earnings.

The company, which was scheduled to release its 2023-24 results on Thursday, unexpectedly announced them late on Wednesday evening.

Mineral Resources reported an underlying net profit after tax of $158 million for the year, down from $769 million in 2022-23. Statutory profit fell to $114 million from $244 million, despite a 10% increase in revenue to $5.27 billion.

Analysts had anticipated an underlying NPAT as low as $130 million, but the significant slump in earnings and the doubling of net debt led the company to forego a final dividend to shareholders.

Despite higher lithium production and sales from the Mt Marion and Wodgina mines, increasing by 46% and 41% respectively, the company faces additional pressures. MinRes has completed the construction phase of its Onslow Iron project and aims to ramp up production to 35 million tonnes per annum by June next year. This will be a challenging task in the currently oversupplied iron ore market.

However, Onslow's success is crucial for MinRes, as it plans to use the project's cash flow to reduce its substantial net debt of $4.43 billion. The sale of a 49% stake in its dedicated Onslow haul road to Morgan Stanley Infrastructure Partners should provide some relief, with $1.3 billion due early next year.

To conserve cash, MinRes has deferred all expansion projects in its lithium division and implemented cost-cutting measures across the board.

Justifying this decision, CEO Chris Ellison stated in Wednesday night's announcement, "Given the persistent lithium price and our ongoing investment in Onslow Iron, we will continue to adopt a cautious approach during FY25, deferring expansion projects and focusing on cost reduction and cash preservation. This strategy is reflected in the Board's decision not to declare a final dividend for FY24."

Ellison further explained, "This was the most significant year of development in our history, culminating in the start-up of the transformative Onslow Iron project. We anticipate rapidly deleveraging as Onslow Iron reaches its nameplate capacity and becomes cashflow positive within the next 12 months."

MinRes shares declined by more than 3% on Wednesday, extending their year-to-date decline to a substantial 37%.