Deterra Royalties FY profit rises on stronger iron ore pricing
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The news: Deterra Royalties shares climbed at market open on the ASX after the mining royalties group posted positive profit growth driven by a 13% rise in iron ore pricing in FY24.
The numbers: Deterra shares were up 3.3% to $3.80 by 10:35am AEST.
The group reported full-year revenue of $240.5 million, up 5% year on year. Net profit after tax rose 1.6% to $154.9 million, but fell short of consensus estimates of $162.2 million, according to Visible Alpha data.
EBITDA lifted 3.9% to $227.9 million while Deterra's EBITDA margin lowered from 96% to 95%.
The board declared a fully franked final dividend of 14.4 cents per share, bringing total FY24 dividends to 29.29 cents per share, equal to 100% of NPAT.
The context: Deterra said revenue growth was driven by stronger iron ore pricing, which more than offset marginally lower sales tonnes at its main iron ore asset at Mining Area C (MAC) in Western Australia.
Royalties from MAC were up 11% year on year to $239.3 million, as a 13% increase in iron ore pricing was partially offset by a 2% decrease in sales volumes.
Deterra shares tumbled in June after the group announced plans for an all-cash offer to buy UK-listed Trident Royalties for $276 million, and said it would halve its dividend payout ratio from next year.
What they said: Deterra managing director Julian Andrews said: "Deterra's full year results for FY24 once again reflect the quality of our cornerstone MAC asset and the high margin nature of our business model".
"I am also very pleased to note in FY24 we announced an offer to acquire Trident Royalties Plc.," he said.
"This investment is a first step in our strategy to grow and diversify our portfolio, providing immediate cash flow from currently producing operations, as well as multiple sources of near- and medium-term growth from assets in construction and longer-term optionality from development stage assets."
The source: ASX announcement
