Iluka Resources (ILU) H1 2024 earnings summary

Executive summary

• Mineral sands revenue for H1 2024 was $606 million, down 15% year-over-year, with EBITDA margin at 42% and NPAT at $134 million, reflecting ongoing macroeconomic uncertainty and stable zircon prices.

• Interim dividend of 4 cents per share fully franked was declared, in line with the dividend framework and payable in September 2024.

• Net cash position (excluding non-recourse debt) was $305 million at 30 June 2024; reported Group net cash was $154 million.

• Free cash outflow for mineral sands was $14 million; Group free cash outflow was $47 million.

• Sales mix shifted to higher-margin zircon, but lower prices and volumes in synthetic rutile impacted results.

Financial highlights

• Mineral sands EBITDA was $252 million, down 29% compared to H1 2023; underlying Group EBITDA was $264 million, down 28%.

• NPAT declined 34% year-over-year to $134 million; basic earnings per share dropped to 31.3 cents.

• Operating cash flow was $189 million, down 17%; capital expenditure was $173 million.

• Unit cash costs of production rose 69% to $1,405/t Z/R/SR; unit cost of goods sold increased 14% to $1,214/t.

• Group EBIT was $202.1 million, down 33% from H1 2023.

Outlook and guidance

• Q3 zircon price expected to remain broadly flat; H2 2024 regional demand to be influenced by economic and political dynamics.

• Synthetic rutile sales are second half weighted, with average contracted sales price for H2 reduced by US$50/t from H1.

• Take-or-pay contracts for ~200ktpa of synthetic rutile through 2026 provide revenue certainty.

• Balranald project remains on track for commissioning in H2 2025.

• Capital guidance for Eneabba Rare Earths Refinery is $1.7–1.8 billion, with government funding discussions ongoing.