Alita Resources Limited (SGX:40F): FY2024 Half-Year Analysis

Alita Resources Limited has released its financial report for the half-year ended 31 December 2024. The report reflects a company in transition, following the divestment of substantial assets and a period of restructuring. Below, we analyze key financial metrics, major events, and the outlook for investors.

Key Financial Metrics and Performance

Historical Performance Trends

The dramatic YoY decline in net profit and earnings per share is due to the sale of the company’s primary operating asset (Bald Hill mine, via subsidiaries Tawana Resources and Lithco No.2 Pty Ltd) in November 2023. The previous period’s result was bolstered by a one-off gain from the sale, reflected in the \$150.2 million profit from discontinued operations. Current operations are minimal, with no revenue-generating business segments as at the reporting date.

Major Divestments and Corporate Events

• Sale of Mining Assets: In November 2023, Alita completed the sale of Tawana Resources Pty Ltd (which owned Bald Hill) to Mineral Resources Limited (MinRes), receiving \$176.9 million in cash and a \$58.2 million reimbursable tax receivable. This transaction fundamentally changed the company’s business model, leaving it without operating assets.
• Escrow Funds: \$100.3 million remains in escrow, pending the resolution of Australian Tax Office (ATO) assessments related to the asset sale and prior years. Release of these funds could materially improve liquidity.
• Post-period Funding: In October 2025, MinRes agreed to provide a \$2 million loan facility to fund Alita’s ongoing compliance and management costs, which was fully drawn down after period-end.
• Board and Management Changes: There have been significant changes to the board and company secretaries, reflecting the company’s transition to a new phase focused on compliance, regulatory matters, and strategic reassessment.

Exceptional Gains and Expenses

The prior period’s profit was almost entirely due to the gain on the divestment of discontinued operations. Current period results show a modest net profit from continuing operations, driven primarily by interest income on escrowed funds rather than business activity. Administrative and compliance costs remain the largest expenses.

Tax and Legal Matters

Alita is engaged in complex and ongoing negotiations with the ATO regarding historical tax assessments. The company has recognized a significant receivable from the acquirer (MinRes group) for taxes attributable to the sold subsidiaries, aligning the liability with a reimbursement right. The outcome of these matters will materially affect available cash and the company’s future direction. No other legal or contingent liabilities have been disclosed.

Chairman’s Statement

The tone of the Chairman’s statement is pragmatic and focused on compliance and stabilization:

“Since its appointment, the new Board has prioritised the restoration of statutory compliance, including financial reporting obligations, and has sought relevant regulatory extensions to support this process… The Company continues to engage with its legal and taxation advisers to address complex issues arising from historical Notices of Assessment issued by the ATO for the income years ended 30 June 2019 through to 2024. In parallel, it has re-engaged with shareholders and professional stakeholders with the objective of positioning Alita for future corporate initiatives.”

This reflects a cautious and rebuilding stance, with no immediate plans for new business operations.

Directors’ Remuneration and Related Party Transactions

No explicit data on directors’ pay or related party transactions were disclosed, except that there were no related party transactions during the period other than standard key management compensation.

Outlook and Risks

Alita’s future is contingent on resolving outstanding tax matters and gaining access to escrowed funds. The company has no ongoing operations or business segments and is reliant on support from MinRes for operational funding. Any future value creation will depend on the resolution of tax matters and the identification of new strategic opportunities or corporate actions.

Conclusion and Investor Recommendations

Overall Performance: Alita Resources is in a holding pattern, having completed the sale of its key assets and now focusing on compliance and legal matters. The company’s financial position is stable due to escrowed funds and MinRes support, but there is no operating business or dividend stream.

• If currently holding Alita shares: Consider maintaining a cautious hold pending the outcome of tax disputes and the release of escrowed funds, which could trigger value realization or corporate actions. However, be aware of the absence of business activities and ongoing uncertainty.
• If not currently holding: Alita does not present an attractive entry point for new investors at this time, given the lack of operations, unclear strategic direction, and reliance on the outcome of ATO negotiations.

Disclaimer: This analysis is based solely on the information disclosed in Alita Resources Limited’s half-year financial report for the period ending 31 December 2024. Investors should conduct their own due diligence and consult a licensed financial advisor before making investment decisions. Past performance is not indicative of future results.

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