Iluka (ILU) production crashes

Stock

Iluka (ILU) $10.25 as at 24/07/2019

Event

Mineral sands play Iluka has slumped today despite the broader market rallying into new 10 year highs. The company released their 2nd quarter production report pre-market which has investors worried about a soft half year report.

Production across the bulk of the commodities came in well below last year’s level at the half year, with total mineral sands falling more than 20% yoy. Sales were even lower with the company struggling to move Zircon in particular, blaming “trade and geopolitical tensions.” Sales fell almost 25% for the half.

Revenue managed a little better, with rising prices offsetting much of the fall in sales with revenue per tonne jumping more than 20% across the zircon & rutile products. Revenue still lagged 10% on the 1st half of 2018.

Iluka was on a bit of a run – and Market Matters was a beneficiary of part of the rally from January lows, taking a 20+% profit only a few weeks ago – carried higher by an improving market. Today’s report shows that better prices can only do so much.

Iluka (ILU) Chart

Market Matters Take/Outlook

 

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