Iluka Resources shares fall on 'disappointing' quarter
Make us a preferred source
Make us a preferred source on Google
More news: Shares in Iluka Resources tumbled in morning trade on the ASX after the mineral sands miner recorded a drop in production over the September quarter.
Iluka shares lowered 4.9% to $5.90 by 11:20am AEDT, making it the second worst performing ASX 200 stock.
Citi analysts called it a "disappointing" quarter for Iluka, with mineral sand revenue of $232 million trailing their estimate of $306 million.
Iluka output drops in September quarter
The news: Mineral sands miner Iluka Resources has posted a drop in third quarter production amid subdued demand and an ongoing pause at its SR1 kiln.
The numbers: The company produced 138,300 tonnes of zircon/rutile/synthetic rutile in the September quarter, down from 142,100 tonnes. Sales were at 96,600 tonnes, down from 136,500 in the prior quarter.
As a result, third quarter revenue dropped to $232 million, from $338 million in the June quarter.
The context: Iluka said its unit cash costs of production for the year-to-date rose to $1302/tonne, reflecting in part lower production of finished goods, with the ongoing pause at SR1 and the associated build of work in progress material.
The weighted average zircon sand price was broadly stable at USD1891 ($2,840.4.5)/tonne, while synthetic rutile price was also lower at USD1178/t.
The company expects some pressure on zircon prices, with a likely Q4 decline of USD40 to USD50/tonne, given the last quarter is seasonally softer “as customers are reluctant to hold inventory at year-end”.
The sources: ASX announcement, Citi research
