Iluka Resources Limited · ASX:ILU
Iluka Resources — H1 2024 Earnings Presentation
28 slides from Iluka Resources's earnings presentation, Aug 21, 2024
Slide 1: Iluka Resources 2024 Half Year Results
1 Iluka Resources (ASX:ILU) 2024 Half Year Results 21 August 2024 Balranald, New South Wales
Slide 2: Disclaimer
Disclaimer 2 This presentation has been prepared by Iluka Resources Limited (Iluka). By accessing this presentation you acknowledge that you have read and understood the following statement. This presentation includes forward-looking statements reflecting Iluka’s current expectations. These statemen
Slide 3: Rare earths update
Rare earths update 3 1. Continuation of Eneabba refinery development contingent on risk sharing with the Australian Government 2. Rare earths business update to be provided in H2 2024 3. Eneabba refinery capital estimate confirmed at $1.7-1.8 billion 4. Project execution progressing, alongside opera
Slide 4: H1 2024 key features
H1 2024 key features 4 Financial Operations Strategic Global macroeconomic NPAT Cataby and Jacinth- Ability to restart SR1 Balranald on track Wimmera DFS uncertainty continues to $134 million Ambrosia mining retained for commissioning progressing weigh on sales; prices operations at H2 2025 Net cash
Slide 5: H1 2024 sustainability outcomes
5 H1 2024 sustainability outcomes Iluka’s purpose is to deliver sustainable value Maintain zero fatalities Improve employee Strengthen community Optimise mine Set and deliver Iluka’s and reduce injuries and Board diversity relationships closure outcomes decarbonisation pathway 3.0 TRIFR (2.4 in FY 2
Slide 6: Results overview
Results overview 6 Units Half year 2024 Half year 2023 % Change $252m Z/R/SR Production kt 229 368 (38) Mineral sands EBITDA Z/R/SR Sales kt 242 278 (13) ($353m H1 2023) Mineral sands revenue $m 606 712 (15) Mineral sands EBITDA $m 252 353 (29) $134m Mineral sands EBITDA margin % 42 50 (16) NPAT Sha
Slide 7: Underlying net profit – H1 2023 to H1 2024
Underlying net profit – H1 2023 to H1 2024 7 $m 250 Underlying NPAT H1 2023 vs H1 2024 204 200 • Z/R/SR prices reflect some easing from 2023 levels • Zircon sales volume increase was offset by a decline of SR volumes, with take-or-pay contract sales in 15 150 13 2024 being second half weighted ( 46
Slide 8: Group balance sheet – H1 2024
Group balance sheet – H1 2024 8 $305m net cash $m Group net cash (debt) (excluding non-recourse debt) 600 Net cash (debt) (excluding non-recourse debt) Reported net cash (debt) 400 Non-recourse debt 200 $800m MOFA facilities 0 (200) $1,250m non-recourse (400) EFA facilities (600) ($151m drawn) H1 15
Slide 9: Cash flow and balance sheet: Mineral sands and Deterra, excluding rare earths
Cash flow and balance sheet: 9 Mineral sands and Deterra, excluding rare earths H1 2024 free cash out flow $14 million $m 600 Cash flow six months to 30 June 2024 189 7 500 (7) • Decrease in net cash to $281 million with $124 million spent 400 308 ( 76 ) 16 on mineral sands capital expenditure 281 3
Slide 10: Cash flow and balance sheet: Rare earths – non-recourse funding
Cash flow and balance sheet: 10 Rare earths – non-recourse funding $m- Cash flow six months to 30 June 2024 ( 40 ) • Capital expenditure of $49 million ( 80 ) (83) • Iluka equity contribution of $8 million 2 8 ( 120 ) ( 49 ) (5) (127) ( 160 ) Timing of working capital 31 December 2023 Capex Capitali
Slide 11: Deterra Royalties Key Features
Deterra Royalties 11 Key Features Mining Area C royalty receipts (A$m)1 Mining Area C production (Mwmt) Run rate with South Flank = 265 145 mwmt2 228 239 46 13 140 64 64 121 62 92 2 126 119 1 68 89 29 31 34 57 30 47 118 63 61 41 93 96 49 28 31 44 48 26 30 28 28 26 2018 2019 2020 2021 2022 2023 2024
Slide 12: Mineral sands operations
Mineral sands operations 12 Cataby / South West Cataby is a large chloride ilmenite mine in Western Australia, commissioned in 2019. The mine also produces zircon and rutile. Two synthetic rutile kilns (one currently idle), located at Capel in the South West of WA upgrade ilmenite to synthetic rutil
Slide 13: Markets
Markets
Slide 14: Markets – zircon
Markets – zircon 14 Ongoing softness in construction sectors; demand from industrial applications stable. Prices for Iluka’s zircon products are relatively strong and stable US$/t Zircon (premium and standard) net realised FOB price 108kt 25kt 2,800 Zircon sand sales Zircon in concentrate sales 2,40
Slide 15: Markets – high-grade titanium feedstocks
Markets – high-grade titanium feedstocks 15 Take-or-pay synthetic rutile contracts provide high degree of revenue certainty. Rutile sales targeted to welding market. Pigment industry undergoing structural change Price High grade titanium sales 1 and net realised FOB price 2 Sales 86kt 24kt (US$/t) 2
Slide 16: Global pigment market dynamics
Global pigment market dynamics 16 The recent pigment anti-dumping measures announced in Europe, coupled with previous measures implemented in the US and ongoing investigations in other jurisdictions are contributing to structural change in the global pigment market, with the potential to improve the
Slide 17: Inventory position
Inventory position 17 Work in progress inventory build in H1 2024 underpins SR1 restart capability ZRSR kt Z/R/SR finished goods and HMC inventory HMC kt • Heavy mineral concentrate (HMC) inventory of 698kt and finished goods 700 1,600 inventory of 271kt of Z/R/SR 1,400 Iluka’s • HMC inventory build
Slide 18: Rare earths - conceptual pricing mechanism for opaque market
Rare earths - conceptual pricing mechanism for opaque market 18 The Asian Metal Index is the only publicly available price index for Iluka is experienced in selling specialty minerals in opaque markets. An rare earth oxides. It is influenced by actions of the Chinese alternative pricing mechanism ba
Slide 19: Projects
Projects Balranald, New South Wales
Slide 20: Balranald – project update
Balranald – project update 20 Balranald is a rutile-rich critical minerals development in south western New South Wales. Owing to its relative depth, Iluka is developing Balranald via an internally developed, remotely operated underground mining technology Final investment approved in February 2023
Slide 21: Eneabba refinery project update
Eneabba refinery project update 21 Australia’s first fully integrated refinery for the production of separated light and heavy rare earth oxides • $49 million capex in H1 2024 • Majority of long lead packages awarded and activity progressing across all work packages • Detailed earthworks commencing
Slide 22: Wimmera – project update
Wimmera – project update 22 A series of large, fine-grained deposits in Western Victoria, providing a potential multi-decade source of both rare earths and zircon – including the highly valuable heavy rare earths dysprosium and terbium Definitive feasibility study (DFS) approved February 2023 • DFS
Slide 23: Supplementary Information
Supplementary Information
Slide 24: Supplementary Information – Production, Sales, Revenue and Costs
Supplementary Information – Production, Sales, Revenue and Costs 24 H1 2024 H1 2023 % change Production Zircon kt 70.7 129.4 (45) ZIC kt 27.6 37.2 (26) Rutile kt 35.6 30.8 16 Synthetic rutile kt 94.7 170.2 (44) Total Z/R/SR production kt 228.6 367.5 (38) Ilmenite – saleable and upgradeable kt 190.9
Slide 25: Supplementary Information – Income Statement
Supplementary Information – Income Statement 25 A$ million H1 2024 H1 2023 % change Z/R/SR revenue 560.2 661.8 (15) Ilmenite and other revenue 46.0 50.5 (9) Mineral sands revenue 606.2 712.3 (15) Cash costs of production (321.2) (327.2) 2 By-product costs (9.3) (7.3) (27) Inventory movement - cash c
Slide 26: Supplementary Information – Reconciliation of non-IFRS information
Supplementary Information – Reconciliation of non-IFRS information 26 $m JA/MW C/SW RE US/MB1 Operations Expl & Oth Corp Group Mineral sands revenue 270.7 335.5 - - 606.2 - - 606.2 Freight revenue 12.3 11.2 - - 23.5 - - 23.5 Expenses (126.8) (209.8) - (9.0) (345.6) (4.9) (14.2) (364.7) Share of prof
Slide 27: Supplementary Information - Weighted average received prices
Supplementary Information - Weighted average received prices 27 FY 23 Q4 23 Q1 24 Q2 24 H1 24 US$/tonne FOB Zircon premium and standard 2,066 2,0451 1,873 1,907 1,892 Zircon 1,849 1,658 1,753 1,801 1,780 (all products, including zircon in concentrate)2 Rutile 1,887 1,871 1,828 1,690 1,747 (excluding
Slide 28: For more information contact
28 For more information contact Luke Woodgate, General Manager, Investor Relations and Corporate Affairs investor.relations@iluka.com Jacinth-Ambrosia, South Australia