Iluka Resources (ILU) investor relations material

Executive summary

• Maintained stable pricing and secured additional zircon sales for Q1, with 41,000 tons of sand and 11,000 tons of zircon concentrate contracted.

• Cost reduction measures, including idling Cataby and SR2 and completing Balranald capital investment, have led to a significant step-down in expected 2026 cash outflows, over AUD 600 million lower than the prior year.

• Mineral sands revenue declined 13.5% year-over-year to $976 million, with underlying mineral sands EBITDA down 37.2% to $300 million and a margin of 31% for FY 2025.

• Net loss after tax (NPAT) was $288 million, compared to a profit of $231 million in the prior year, driven by lower sales, impairments, and inventory write-downs.

• Balranald mining ramp-up is on track, with first finished mineral sands products expected to enter the market in the second half of the year.

Financial highlights

• Net debt for the mineral sands business reduced to AUD 420 million at the end of January.

• Z/R/SR production increased 12.7% year-over-year to 559kt, but sales volumes were flat at 475kt.

• Unit cash costs of production fell 18.8% to $1,054/t, but unit cost of goods sold rose 7.1% to $1,251/t.

• Free cash flow for mineral sands was negative $386 million, with group free cash flow at negative $888 million.

• A tax refund of about AUD 52 million is expected in H1 due to inventory write-downs.

Outlook and guidance

• 2026 will see materially lower capital deployment, with a focus on cash generation and inventory drawdown.

• 2026 cash costs of production forecast at $420 million, down from $590 million in 2025, reflecting idling of Cataby and SR2 and cost base review.

• Capital expenditure for mineral sands expected to drop to $60 million in 2026, with Eneabba refinery capex forecast at $600 million.

• Balranald production ramp-up is expected to reach investment case rates by mid-year.

• Eneabba refinery commissioning is scheduled for mid-2027, with a two-year ramp-up to full production.