Iluka share price leaps 6% following monster dividend

Iluka share holders are in for a dividend boost.

| More on:
Woman jumping for joy at great news with wide open country around her.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Iluka released it half-year trading results today
  • Net profit soared nearly 186% 
  • The mineral explorer more than doubled its dividend

The Iluka Resources Ltd (ASX: ILU) share price is rocketing after the company released its half-year earnings results today.

The company's share price is currently swapping hands at $10.07, a 6.56% gain. In comparison, the  S&P/ASX 200 Index (ASX: XJO) is up 0.65% at the time of writing.

Let's take a look at what the ASX mineral explorer reported to the market.

Iluka delivers 186% profit boost

Highlights of Iluka's H122 financial presentation for the six months to 30 June 2022 include:

What else did the company report?

Iluka advised that mineral sands revenue lifted 29.8% to $954.9 million, and EBITDA surged 68.9% to $505.4 million. The EBITDA margin for mineral sands lifted from 40.7% in H121 to 52.9% in H122.

The company said the revenue boost reflected high prices spanning all of its products. Zircon prices lifted 40%, while rutile prices soared 23%. The lower US dollar also had a positive impact on Iluka's revenue.

Iluka's interim dividend soared 108.3%, from 12 cents per share in H121 to 25 cents per share in H122.

The company completed the demerger of Sierra Rutile in the first half of 2022. The explorer also made a final investment decision on the Eneabba rare earths refinery in Western Australia.

Management comment

Commenting on the results, Iluka managing director Tom O'Leary said:

Iluka delivered strong outcomes in the first half, both in terms of financial performance and progress on our strategic priorities.

In a macroeconomic environment characterised by inflation and uncertainty, we increased margins and strengthened our balance sheet. This was the result of strong demand for Iluka's products, industry supply constraints and resultant pricing traction.

What's ahead?

Iluka said demand for its products remained strong and supply was tight. European tile production was robust, while Chinese tile production faced challenges in the property market along with COVID-19 restrictions. The company added that demand from the ceramics industry in Brazil and Mexico was higher, and foundry and fused zirconia demand remained elevated in the United States.

Iluka's zircon sales for the third quarter of the calendar year 2022 are fully contracted amid tight supplies.

Iluka highlighted only minimal spot volumes of its high-grade titanium feedstocks were up for grabs in the second half of FY22. Demand is high in North America, with supply security a priority for customers amid the Ukraine war and other global challenges.

Iluka said there was strong customer interest in its remaining uncontracted tonnages from 2023.

O'Leary said Iluka was "well placed" as customers prioritise security of supply. Looking ahead, he added:

Our Australian operations are configured at maximum settings and sales over the second half are likely to continue to be constrained by production. Furthermore, the second half will see first production from the restart of Synthetic Rutile Kiln 1 at Capel.

Other approaching development milestones include the commencement of ground works for the Eneabba rare earths refinery; the completion of the definitive feasibility study for the Balranald project; and the completion of preliminary feasibility studies for the Wimmera and Atacama project

Iluka share price snapshot

The Iluka share price has surged more than 13% in the past 12 months, while it has gained 1.4% in the year to date. Iluka shares have climbed 4.5% in the past month.

Iluka has a market capitalisation of more than $4.2 billion based on the current share price.

Motley Fool contributor Monica O'Shea has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Resources Shares

Miner looking at a tablet.
Resources Shares

The Fortescue share price is down almost 10% in February, time to buy?

Is this an opportunistic time to buy the miner?

Read more »

Two miners standing together.
Resources Shares

2 battered ASX mining shares to buy for cheap right now

The global economy is set to improve in the coming year. That's why one expert is seeing a huge 58%…

Read more »

A happy miner pointing.
Resources Shares

Will Fortescue stock be worth more than CBA by 2026?

The resources giant has done a wonderful job of growing. Can it keep going?

Read more »

a woman wearing a sparkly strapless dress leans on a neat stack of six gold bars as she smiles and looks to the side as though she is very happy and protective of her stash. She also has gold fingernails and gold glitter pieces affixed to her cheeks.
Resources Shares

This ASX gold stock just fell 31%. It's time to buy

The global market for the precious metal remains strong, so Blackwattle analysts advise looking past the recent sell-off of these…

Read more »

A girl holding a globe shouts into a green megaphone about climate change.
Resources Shares

ASX mining shares up amid Labor plan to spend multibillions on renewables revolution

Prime Minister Anthony Albanese will deliver a speech in Newcastle tonight.

Read more »

Miner looking at a tablet.
Earnings Results

South32 share price lifts off as ASX 200 miner greenlights US$2.2 billion project

ASX 200 investors appear optimistic about South32’s major US project approval.

Read more »

Miner and company person analysing results of a mining company.
Resources Shares

BHP share price resilient ahead of Friday's strike action

BHP shares are marching higher today despite a looming workers’ strike on Friday.

Read more »

Female miner smiling at a mine site.
Share Gainers

If I'd invested $5,000 in this ASX mining stock a week ago I'd have $11,923 today!

The little ASX mining stock has drawn rising interest from investors this past week.

Read more »