Deterra Royalties (DRR) H2 2024 earnings summary

Executive summary

• Reported strong FY 2024 financial performance with revenue up 5% to AUD 241 million (or $240.5 million), driven by higher pricing despite slightly lower sales volumes and no capacity payment from Mining Area C.

• Achieved a 95% EBITDA margin and net profit after tax (NPAT) of AUD 155 million (or $154.9 million), with the MAC Royalty as the primary revenue contributor.

• Declared a fully franked final dividend of AUD 0.144 (14.40 cents) per share, totaling AUD 0.2929 (29.29 cents) per share for the year, representing a 100% payout of NPAT.

• Announced and advanced the acquisition of Trident Royalties for GBP 144 million, with shareholder approval and pending UK court sanction, marking the first step in portfolio diversification and growth strategy.

• South Flank mine reached full production capacity, doubling production tonnes subject to royalty since 2021.

Financial highlights

• Total group revenue increased 5% year-over-year to AUD 241 million ($240.5 million), with MAC Royalty revenue up 11% to AUD 239 million.

• Realized price per dry metric tonne rose 13% to AUD 167, offsetting a 2% decline in sales volumes to 116 million dry metric tonnes.

• EBITDA was AUD 227.9 million, with a 95% margin; NPAT was AUD 155 million.

• No capacity payment received in FY 2024 as sales volumes were below the 118 million dry metric tonne threshold.

• Basic earnings per share rose to AUD 0.2930 from AUD 0.2885 year-over-year.

Outlook and guidance

• Focus remains on building a globally diversified royalty portfolio with resilient cash flows and multiple growth sources, targeting value-accretive growth in non-precious metal royalties.

• Ongoing evaluation of investments in bulk, base, and battery commodities, leveraging strong liquidity and access to capital.

• Trident Royalties acquisition expected to complete in the current quarter, providing immediate and future growth opportunities.

• Minimum future dividend payout ratio set at 50% of NPAT, with flexibility to adjust based on investment needs and liquidity.

• FY25 growth expected to be funded within the current capital management framework.