Mp Materials Corp (NYSE:MP) stock rose over 6.4% in the pre-market session of March 19th, 2021 (Source: Google finance) as the company in the fourth quarter of FY 20 has reported the adjusted revenue growth of 100% to $42.2 million in the fourth quarter of FY 20, beating the analysts’ estimates for revenue of $37.5 million. The company’s Adjusted Net Income rose by a factor of 11.0 year-over-year to $21.9 million.
Though, the fourth quarter of 2020 net income was also affected by non-cash, stock-based compensation expense related mainly to stock grants issued in connection with MP Materials becoming a public company in November 2020. Adjusted EBITDA rose 297% year-over-year due to higher volumes and per-unit profitability, partially offset by increased public company costs. There has been 8% increase in production compared to the fourth quarter of 2019 was mainly due to the increased productivity at Mountain Pass. Production cost of $1,589 per MT of REO was down slightly year-over-year. For fiscal 2020, the company has reported Adjusted Net Income of $21.2 million compared to an Adjusted Net Loss of $7.8 million in 2019 mainly due to the higher Adjusted EBITDA.
Moreover, the topline growth driven by increases in both the realized sales prices of contained rare earth oxide (REO) in concentrate and in the metric tons (MT) of REO sold. The realized sales price rose 70% due to higher demand for REO driving increase in market prices, as well as the lifting of certain import duties in China. The 21% increase in MT sold was due to rise in demand for REO as well as higher percentages of REO in concentrate driven by improved productivity. Sold volumes fluctuate quarter-to-quarter based on shipment timing, but the Company continues to forecast 100% sell-through of its production.
Meanwhile, in fiscal 2020, the company had ramped up the production of rare earths by nearly 40%, scaled the team to over 300 people, and completed design improvements of the Stage II optimization plan at Mountain Pass. The accelerating global transformation towards electrification and decarbonization is creating strong demand for critical rare earth materials. These trends is expected to present a bright outlook for the Company as it plans to prepare to begin delivering separated rare earth oxides in 2022.
On other hand, MP stock gave strong result recently as it is one of the very few non-Chinese options in the rare earth space. China has been floating the idea that it might limit rare earth exports, which would be a big problem for a lot of companies now reliant on the country for these materials.