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REPORTING SEASON: Iluka Resources (ILU)

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Figure 1: Iluka Resources 12 month chart

 

Iluka Resources Limited (ILU) no FY15 guidance surprised the markets.

 Iluka Resources Limited (ILU) reported a larger than expected slide in profit for the 6 months up until the end of December 2014. The result included non-cash impairment charges totalling $86.5 million. The impairments were in relation to its US operations, Iluka advised the market of these charges back in December 2014.

 The size of Iluka’s net loss after tax was the surprise in this result, with sales volumes unchanged from its quarterly results. Zircon, Rutile and Synthetic Rutile (ZR/SR) sales volumes were up 5% although sales revenue fell by 5%. The mineral ZR/SR market is still well over supplied but demand is improving for other mineral sands like titanium dioxide.

 Total cash production costs lifted slightly over the year to $381.9 million. Iluka’s balance sheet is still positive with net debt of $59 million and free cashflow of $196 million.

 Iluka said it wasn’t in a position to issue any firm guidance for 2015 which surprised the market. As Iluka has regularly done so when releasing its full year results. Iluka did say it does see a gradual recovery in demand for Zircon, with sales lifting in the 2nd half of 2014.

 ILU will pay a $0.13 interim dividend to shareholders (below market expectations of $0.16) on 31 March 2015

 

You can see all of CommSec’s reporting season analysis by clicking here.

Juliana Roadley, Market Analyst,