Iluka Resources (ILU) H2 2024 earnings summary

Executive summary

• Revenue declined 9% to $1,129 million and NPAT fell 33% to $231 million in 2024, reflecting subdued market conditions and inflationary pressures.

• EBITDA margin remained strong at 42% despite higher unit costs and inflation.

• Major project execution advanced, including Eneabba rare earths refinery and Balranald development.

• Final dividend of 4 cents per share, with a total FY 2024 dividend of 8 cents, fully franked.

• Free cash outflow increased to $(288) million due to significant capital investment in Eneabba and Balranald.

Financial highlights

• Mineral sands revenue was $1,129 million, with net profit at $231 million and underlying EBITDA margin at 42%.

• Operating cash flow from mineral sands was $252 million, funding most of the $272 million in growth capex.

• Net cash position for mineral sands was $90 million; group net debt at $115 million, including $205 million non-recourse rare earth debt.

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

• Free cash flow for the group was negative $288 million.

Outlook and guidance

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

• No restart of SR1 kiln expected in 2024; inventory levels and market indicators will guide future decisions.

• Ongoing focus on cost reduction, with $20 million in annual savings targeted from 130 role reductions.

• Anticipated equity contributions to rare earth refinery of ~$100 million per year through 2027.

• Capital expenditure guidance for 2025: $480 million for mineral sands, $600 million for Eneabba refinery.