Deterra Royalties (DRR) H2 2024 earnings summary

Executive summary

• Revenue increased 5% year-over-year to AUD 241 million ($240.5 million), driven by higher pricing despite slightly lower sales volumes and no capacity payment from Mining Area C.

• EBITDA reached AUD 227.9 million with a 95% margin, and NPAT was AUD 155 million ($154.9 million), both up from FY23.

• Fully franked final dividend of AUD 0.144 per share, totaling AUD 0.2929 per share for FY24, representing a 100% payout of NPAT.

• Announced and advanced the acquisition of Trident Royalties Plc for GBP 144 million, expanding the portfolio with 21 royalty and offtake assets, pending UK court approval.

• Achieved net-zero operational (scope 1 and 2) greenhouse gas emissions.

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 ($239.3 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 margin remained high at 95%, reflecting a low overhead business model.

• No capacity payment received in FY24 as sales volumes were below the 118 million dry metric tonne threshold.

• Operating expenses were AUD 9.1 million, business development expenses AUD 3.5 million, and depreciation AUD 0.5 million.

Outlook and guidance

• Focus remains on building a globally diversified royalty portfolio with resilient cash flows and multiple growth sources.

• Ongoing evaluation of value-accretive 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.