18/08/2015 - 12:45

Iluka posts 74% profit jump

18/08/2015 - 12:45

Bookmark

Save articles for future reference.

Mineral sands miner Iluka Resources has lifted its first-half profit by 74 per cent, to $20.4 million, on the back of a weaker Australian dollar.

Iluka Resources' Tutunup South mineral sands project in the South West.

Mineral sands miner Iluka Resources has lifted its first-half profit by 74 per cent, to $20.4 million, on the back of a weaker Australian dollar.

The company also reduced production costs by 12.6 per cent, lowered its debt by 48.3 per cent to $80.2 million, and lifted revenue by 2 per cent to $349.6 million

In a statement, Iluka said the increase in profit was the result reflected the lower value of the Australian dollar against the US dollar, coupled with lower depreciation charges.

The company declared an interim dividend of 6 cents per share, fully franked, in line with its 2014 interim dividend payout.

“Free cashflow generation in the first-half was associated with the decision by directors to declare the interim dividend,” managing director David Robb said.

“Iluka’s balance sheet remains strong, both absolutely and relative to many players in the resources sector, with low net debt and significant funding headroom.

“This enables Iluka to continue to invest in its business and to consider external investments in a counter-cyclical manner where financial merit and strategic rationale are evident,” he said.

Mr Robb said Iluka was investing in areas such as market development, innovation and technology, exploration, and in the advancement of its mineral sands projects.

“The company has also continued to work towards the satisfaction of pre-conditions to its potential acquisition of Kenmare Resources,” he said.

In April, Iluka proposed a scrip takeover for Irish company Kenmare for $363 million.

Looking forward, Mr Robb said overall production was expected to be weighted in the second half, following the restart of mining at the company’s Tutunup South project, as well as the recommencement of its synthetic rutile kiln 2.

“The synthetic rutile kiln has operated at a 99 per cent utilisation rate and, as such, delivered higher than budgeted volumes, while displaying efficient unit cash cost performance,” he said.

“Combined Sales of rutile and synthetic rutile are also expected to be second-half weighted, along with revenues and free cash flow.”

Iluka shares were 1.6 per cent higher to $7.44 each at 12:45pm.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

Subscription Options