Iluka Resources Limited (ILU)



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General Information
Company Name: Iluka Resources Limited
Stock Code: ILU
Website: www.iluka.com
GICS Sub-Industry: Diversified Metals & Mining
Market Cap ($M): 3,559
Equiv. Shares (M): 419

Current Price Data+
Current Price Open High Low Last Close Volume Price Movement
 $ 8.320 $ 8.370 $ 8.440 $ 8.205 $ 8.500 1,785,193 $ -0.180  -2.118 %

Current Broker Consensus Recommendation more
Recommendation: Buy (1.6)
Recommendation Date: 26th Mar 2015
Brokers Surveyed: 5

Company Overview

Business Description:
Iluka Resources Limited (ILU) is involved in the exploration, project development, operation and marketing of mineral sands. Operations are located in Australia and the United States. For FY14, overall production volumes of Zircon, Rutile and Synthetic Rutile (Z/R/SR) are 534,800t. The current ore reserves are 24.9Mt and mineral resources of 176.4Mt.

Strategy Analysis:
Iluka¬īs objective is to create and deliver value for shareholders through exploration and innovation. The focus is on large, high quality, long life operations. The company seeks to meet customer needs though investment in high quality production sources, product and technical development as well as providing price leadership in mineral sand products to allow sustainable customer profitability. Iluka Resources reported NPAT down 33% to $363.2m for the year ended 31 December 2012. Revenues from ordinary activities were $1.15bn, down 29.5% from last year. Sales volumes year-on-year were significantly lower, with combined zircon, rutile and synthetic rutile sales volumes down 52.9% at 488.9 thousand tonnes compared to 1,038.1 thousand tonnes in 2011. Lower sales volumes were influenced by a combination of external factors, including: low demand associated with global economic conditions and fragile business confidence levels; inventory de-stocking and lower levels of zircon usage in tile manufacturing in China. Basic EPS was 87.1 cents compared to 130.1 cents last year. Net operating cash flow was $250.6m compared to $749.5m last year. The final dividend declared was 10.0 cents, taking the full year dividend to 35.0 cents compared with 75.0 cents last year.


Financial Summary
Year to Dec NPAT EPS EPS chg (%) PER DPS Yield (%) Franking (%)
2016  F 283.8 67.8 100.4 12.5 50.0 5.9 100.0
2015  F 141.6 33.8 626.2 25.1 30.0 3.5 100.0
2014  A 19.5 4.7 -79.5 179.8 19.0 2.3 100.0
Source: Morningstar analyst estimates.

Peer Comparison
EPS Growth (%) P/E (%) Dividend Yield (%)
Company Mkt Cap 2014 A 2015 F 2016 F 2014 A 2015 F 2016 F 2014 A 2015 F 2016 F
BHP Billiton (BHP) $96,672 M 0.1223 -0.2880 -0.0626 11.2565 15.8105 16.8665 4.27 5.27 5.35
Iluka Resources (ILU) $3,446 M -0.5337 1.1643 0.8304 57.5524 26.5913 14.5278 2.31 3.26 4.69
PanAust (PNA) $1,111 M -- -- 0.6990 -- 25.1836 14.8228 2.13 2.21 1.10
Rio Tinto (RIO) $24,337 M -0.1938 -0.3204 0.1906 9.0222 13.2758 11.1502 4.69 5.21 5.43
Sims Metal Management (SGM) $2,570 M 3.0215 0.8039 0.3109 37.2846 20.6686 15.7663 0.80 2.55 3.01

Market Comparison
Earnings P/E Ratio P/B Ratio P/E Growth P/S Ratio
ILU 1.21 46.1 2.48 0.46 4.49
Market 0.88 16.6 1.30 2.38 1.59
Sector 0.58 12.7 0.68 2.00 2.34

Directors
Name Position Start Date
Mr David Alexander Robb Chief Executive Officer,Managing Director 18 August 2006
Mr Gavin John Rezos Non-Executive Director 20 June 2006
Mrs Jennifer (Jenny) Anne Seabrook Non-Executive Director 21 May 2008
Mr James Hutchison Ranck Non-Executive Director 01 January 2013
Mr Wayne Geoffrey Osborn Non-Executive Director 26 March 2010
Mr Marcelo Bastos Non-Executive Director 20 February 2014
Mr Gregory John Walton Martin Non-Executive Director,Non-Executive Chairman 01 January 2013

Management
Name Position
Alan Tate Chief Financial Officer and Head of Strategy and Planning
Steven Wickham Chief Operating Officer, Mineral Sands
Cameron Wilson Company Secretary
Christopher Cobb Head of Alliances, New Ventures and Royalties
Matthew Blackwell Head of Marketing, Mineral Sands
Douglas Warden Head of Resource Development, Mineral Sands
Nigel Tinley Joint Company Secretary

Substantial Shareholders
Holding Name
45,649,855 (10.90%) Schroder Investment Management Australia Limited
21,345,206 (5.09%) M & G Investment Management Limited
42,324,744 (10.11%) SailingStone Capital Partners LLC
25,929,369 (6.19%) Northcape Capital Pty Ltd
40,111,686 (9.58%) BlackRock Group

Calendar of Events
Date Event
16 March 2016 Report (Annual)
16 February 2016 Report (Prelim)
14 January 2016 Report (Quarterly)
15 October 2015 Report (Quarterly)
21 August 2015 Report (Interim)
15 July 2015 Report (Quarterly)
20 May 2015 AGM
© 2011 Morningstar, Inc. All rights reserved. The data and content contained herein are not guaranteed to be accurate, complete or timely. Neither Morningstar, nor its affiliates nor their content providers will have any liability for use or distribution of any of this information. To the extent that any of the content above constitutes advice, it is general advice that has been prepared by Morningstar Australasia Pty Ltd ABN: 95 090 665 544, AFSL: 240892 (a subsidiary of Morningstar, Inc.), without reference to your objectives, financial situation or needs. Before acting on any advice, you should consider the appropriateness of the advice and we recommend you obtain financial, legal and taxation advice before making any financial investment decision. If applicable investors should obtain the relevant product disclosure statement and consider it before making any decision to invest. Some material is copyright and published under licence from ASX Operations Pty Limited ACN 004 523 782 ("ASXO"). DISCLOSURE: Employees may have an interest in the securities discussed in this report. Please refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/fsg.asp.

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