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, up 33% from H1 2023, payable in September 2024.

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

• Strategic capital investments continued, with Balranald on track for H2 2025 commissioning and Eneabba progressing.

• Revenue certainty maintained through long-term synthetic rutile contracts and stable zircon pricing.

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; operating cash flow was $189 million, down 17%.

• 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.

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

• Basic earnings per share dropped to 31.3 cents from 48.3 cents year-over-year.

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.

• Balranald project expected to commission in H2 2025, producing zircon, rutile, and feedstocks.

• Eneabba rare earths refinery capex guidance is $1.7–1.8 billion, with government funding discussions ongoing.

• Growing optimism for pigment industry in 2025, supported by anti-dumping measures and industry consolidation.