Iluka’s profit down as virus dents demand
Mineral sands miner Iluka Resources has posted a 17 per cent fall in first-half net profit and decided against paying an interim dividend as COVID-19 dents sales volumes.
The company posted a result of $113 million, down 17 per cent from the previous corresponding period, after a 16.3 per cent drop in revenue.
Total sales volumes of zircon, rutile and synthetic rutile dropped by one-fifth.
Zircon is mainly used in ceramics while rutile mainly contains titanium dioxide and is used in pigment, welding and other applications.
Iluka said demand for zircon fell due to the pandemic and prices dropped, but rutile prices were up 7 per cent, reflecting ongoing contractual arrangements.
Earnings were boosted by currency exchange rates, increasing the Australian dollar value of mainly US dollar denominated sales.
Iluka also rakes in a royalty from iron ore produced at BHP's Mining Area C project in Western Australia, which was up 16 per cent to $48 million. It plans to demerge the asset to a separate, ASX-listed company named RoyaltyCo, with a shareholder vote expected to be held by the end of October.
"Iluka has record a solid first-half result given the impact of COVID-19 on zircon and titanium markets and the global economy broadly," managing director Tom O'Leary said.
"Operational performance was mixed in the first half, with strong results from the Australian sites, while challenges continue to be experienced at Sierra Rutile.
"While this is an ongoing source of frustration, access to technical expertise in Sierra Leone has been hampered by travel restrictions."
Originally published as Iluka's profit down as virus dents demand