Iluka Resources posts lower FY25 profit but advances rare earths strategy

The Iluka Resources Ltd (ASX: ILU) share price is in focus after the miner posted $976 million in full-year mineral sands revenue and declared a final dividend of 3 cents per share fully franked.

What did Iluka Resources report?

• Mineral sands revenue of $976 million, down from $1,129 million in FY24
• Underlying mineral sands EBITDA of $300 million, with a margin of 31%
• Net profit after tax (NPAT) loss of $288 million, impacted by $566 million in impairments and write-downs
• Operating cash flow of $61 million (FY24: $252 million)
• Net debt (excluding non-recourse debt) of $473 million at year-end
• Final dividend of 3 cents per share fully franked; total full year dividend of 5 cents

What else do investors need to know?

The 2025 result reflects challenging conditions in the mineral sands market, with subdued demand and softer pigment industry activity. Iluka responded by suspending production at its Cataby and Synthetic Rutile 2 operations and completing a reset of its cost base.

On the development front, the company commenced mining at the high-grade Balranald site in January 2026 and expects to bring a second rig online shortly. Construction of the Eneabba rare earths refinery continues on budget, with commissioning targeted for 2027. Iluka also adjusted long-term synthetic rutile contracts to guarantee at least $240 million in contracted revenue for 2026.

What did Iluka Resources management say?

Managing Director Tom O’Leary said:

2025 saw challenges for mineral sands contrast with strong momentum in rare earths. External developments across both industries have validated Iluka’s approach to our respective businesses, including in relation to diversification, operational and market discipline, capital allocation and balance sheet management.

What’s next for Iluka Resources?

Iluka expects mineral sands costs and capital expenditure to decrease in 2026, following the cost reset and as the Balranald project ramps up. Management says the company is well positioned for a range of industry outcomes thanks to its diversified product mix and significant inventory.

The focus for 2026 and beyond is disciplined delivery at both Balranald and the Eneabba rare earths project. Engineering at Eneabba is now more than 95% complete, with offtake discussions advancing as construction picks up pace.

Iluka Resources share price snapshot

Over the past 12 months, the Iluka Resources share prices have risen 13%, outperforming the S&P/ASX 200 Index (ASX: XJO) which has risen 6% over the same period.

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The post Iluka Resources posts lower FY25 profit but advances rare earths strategy appeared first on The Motley Fool Australia.

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Motley Fool contributor Laura Stewart 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. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial summary of the company announcement. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.