Iluka Resources (ILU) H2 2024 earnings summary

Executive summary

• Achieved strong financial performance in 2024 with a 42% margin, despite inflationary pressures, higher costs, and muted global demand, while maintaining operational and pricing discipline.

• Revenue declined 9% to AUD 1.12 billion, and NPAT fell 33% to AUD 231 million, reflecting lower production and higher unit costs.

• Progressed Balranald project, set for H2 2025 commissioning, and advanced Eneabba rare earths refinery, now fully funded with a $1.65 billion non-recourse government loan.

• Cost review led to 130 role reductions, targeting AUD 20 million in annual savings.

• Advanced feasibility for Wimmera rare earth project and declared a resource estimate for Goschen South deposit.

Financial highlights

• Revenue reached AUD 1.12 billion, with net profit at AUD 231 million and EBITDA margin at 42%.

• Operating cash flow from mineral sands was AUD 252 million, funding most of the AUD 272 million in growth capex; group free cash flow was negative AUD 288 million.

• Final dividend of AUD 0.04 per share, full-year dividend AUD 0.08 per share, fully franked.

• Net cash position for mineral sands was AUD 90 million; group net debt at AUD 115 million, including non-recourse rare earth debt.

• Unit cash costs of production rose 25% to AUD 1,298/t Z/R/SR; unit cost of goods sold up 6% to AUD 1,190/t.

Outlook and guidance

• Balranald commissioning and ramp-up expected in H2 2025, with production to be stockpiled before market release.

• FY 2025 production guidance: 495kt Z/R/SR, with zircon sand at 165kt, rutile at 50kt, and synthetic rutile at 220kt.

• Cash costs of production expected to rise to AUD 680 million, with unit cash costs at AUD 1,370/t.

• Capital expenditure guidance: AUD 480 million for mineral sands, AUD 600 million for Eneabba refinery.

• Market conditions for zircon and titanium expected to improve in 2025, supported by pigment producer optimism and anticipated restocking.