Iluka Resources (ILU) H2 2025 earnings summary

Executive summary

• Mineral sands revenue declined to $976 million for 2025, down from $1,129 million in 2024, with underlying EBITDA down 37.2% to $300 million and a margin of 31% for FY 2025.

• NPAT was a loss of $288 million, impacted by lower sales, $566 million in pre-tax impairments, and inventory write-downs.

• Cost reduction measures, including suspending Cataby and SR2 and completing Balranald investment, led to a significant step-down in expected 2026 cash outflows, over AUD 600 million lower than the prior year.

• Balranald mining ramp-up is on track, with commissioning underway and first finished mineral sands products expected in the second half of the year.

• Eneabba rare earths refinery construction is progressing well, with over 95% engineering complete, over $1 billion spent or committed, and commissioning targeted for 2027.

Financial highlights

• Underlying mineral sands EBITDA was $300 million, down from $477 million in 2024, with a margin of 31%.

• Net debt for the mineral sands business increased to AUD 473 million as of December 2025, compared to net cash of $90 million in 2024.

• Free cash flow for mineral sands was negative $386 million, with group free cash flow at negative $888 million.

• Receivables expected to normalize in the coming months, with a current tax asset of AUD 52 million to be refunded in H1.

• Final fully franked dividend of 3 cents per share, with total FY 2025 dividend at 5 cps, down 37.5% year-over-year.

Outlook and guidance

• 2026 cash costs of production forecast at $420 million, down from $590 million in 2025, reflecting idling of Cataby and SR2 and cost base review.

• Capital expenditure for mineral sands expected to drop to $60 million in 2026, with Eneabba refinery capex forecast at $600 million.

• Total cash requirements for mineral sands in 2026 expected to be $665 million, 48% lower than 2025.

• Production guidance for 2026: 130kt zircon sand, 50kt zircon in concentrate, 85kt rutile, and 265kt total Z/R/SR.

• Confident in securing offtake contracts for rare earths in 2026, with a focus on sustainable, commercial returns.