Iluka Resources Limited
 
The company delivered what must be regarded as a solid performance in its latest half yearly results at a time when resource companies are going through a tough time. While reducing operating costs, it has simultaneously focused on improving the efficiency of its global operations and this should provide a solid foundation for better results going into the future.
 
Results for the six months to 30 June 2015
 
The company reported mineral sands revenues of $ 349.6 million which is a marginal increase over the previous year. Revenues for the principal products namely zircon/rutile/synthetic rutile (ZR/SR) excluding the byproduct revenues from sale of ileminite concentrate, iron concentrate and activated carbon came to $ 311.7 million which was a 10.8% increase over the previous year. ZR/SR sales volumes for the period was 0.4% lower than the previous year but the higher revenues was because of the effect of exchange rates which resulted in an increased average realisation in AUD terms. This offset the marginally lower sales volumes as well as the weighted average of prices received in USD. Lower byproduct revenues was a result of the company's decision less iron and ileminite concentrate because of the prevailing market prices for these products.


Group Results (Source  - Company Reports)
 
The net profit after tax was $ 20.4 million compared to $ 11.7 million for the previous year and the higher earnings were a combination of the lower exchange rate and the reduced amount of depreciation. The free cash flow generated was $ 39 million compared to $ 63.9 million in the same period of the previous year. The decline was partly due because of declining receipts from Mining Area C because of the decline of $ 14.2 million in royalties as a result of the lower iron ore prices as well as lower operating receipts because of the timing of cash collections. Included in the income of Mining Area C is a amount of USD 8 million as a result of the change in the royalty arrangement to be received in the second half of FY 2015.
 
The combined sales volume of Z/R/SR at 275.9 thousand tonnes was about the same as the 277.1 thousand tonnes sold in the previous year. Zircon sales increased by 4.9% year-on-year to 153.4 thousand tonnes while the combined rutile and synthetic rutile of 122.5 thousand tonnes was marginally lower than the previous year because the scheduling of sales of high-grade titanium dioxide and the rebalancing of supply chains by some customers. The majority of the company's high-grade ore sales are now contracted for 2015 including the recently restarted rutile kiln 2 and the company expects overall sales to be weighted towards the second half of the year.


NPAT (Source - Company Reports)
 
Cash costs of production dropped by 12.6% to $ 175.5 million and this was associated mainly with lower production of byproducts and ileminite concentrate and byproduct costs were $ 14.5 million lower than the previous period. The total cash costs of production of Z/R/SR excluding byproducts was $ 170.5 million compared to $ 181.2 million in the previous period. Unit cash costs for Z/R/SR were $ 616/tonne compared to $ 719 in the first half of 2014 and the 2014 full-year figure of $ 668. This was a reflection of higher production and the completion of mining In the Murray Basin among other factors. Including byproducts, unit cash costs of production for Z/R/SR were down 20% to $ 634/tonne compared to the previous period.
 
Mining sands EBITDA came to $ 114.4 million an increase of 6% over the previous year and EBIT was $ 30.8 million, an increase of 123.2% over the previous period. MAC earnings from iron ore royalties increased by 2.6% to $ 39 million including capacity payments of $ 3 million ( compared to $ 1 million in the previous period) and a one-off gain of $ 8 million because of changes to the royalty 

---

Disclaimer
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people.Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376).The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation.Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product.The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd currently hold positions in:  BHP, BKY, KCN, PDN, and RIO. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.
Copyright
Copyright © 2014 Kalkine Pty Ltd ABN 34 154 808 312. No part of this website, or its content, may be reproduced in any form without the prior consent of Kalkine Pty Ltd.
Kalkine is a trading name of Kalkine Pty Ltd ABN 34 154 808 312, which holds Australian Financial Services Licence No. 425376.