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Deterra Royalties Ltd (AU:DRR)
ASX:DRR
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Deterra Royalties Ltd (DRR) AI Stock Analysis

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AU:DRR

Deterra Royalties Ltd

(Sydney:DRR)

Rating:77Outperform
Price Target:
AU$4.50
▲(7.66% Upside)
Deterra Royalties Ltd's strong financial performance and positive earnings call are the most significant factors driving the score. The company's robust revenue growth and high profitability margins are complemented by a balanced technical outlook. Valuation metrics suggest the stock is fairly priced, with an attractive dividend yield. Despite some challenges noted in the earnings call, the overall sentiment remains positive.

Deterra Royalties Ltd (DRR) vs. iShares MSCI Australia ETF (EWA)

Deterra Royalties Ltd Business Overview & Revenue Model

Company DescriptionDeterra Royalties Ltd (DRR) is an Australian-based company primarily engaged in the management and operation of royalty interests in the mining sector. The company focuses on generating income through its strategic interests in mineral resources, particularly iron ore. Deterra holds a portfolio of royalties that provides it with a steady stream of revenue from the production activities of its partners in the mining industry.
How the Company Makes MoneyDeterra Royalties Ltd makes money by earning royalties from its interests in mining projects. The company's primary revenue stream comes from its royalty agreements with mining operators, where it receives a percentage of the revenue or profit generated from the sale of minerals extracted from the land over which it holds royalty rights. One significant partnership contributing to its earnings is its royalty interest in the Mining Area C iron ore project operated by BHP Group. This arrangement allows Deterra to benefit from the production volume and pricing of iron ore, providing a stable and predictable income source. Additionally, Deterra may seek to expand its royalty portfolio to include other mineral resources, thereby diversifying its revenue streams.

Deterra Royalties Ltd Earnings Call Summary

Earnings Call Date:Aug 18, 2025
(Q4-2025)
|
% Change Since: |
Next Earnings Date:Feb 24, 2026
Earnings Call Sentiment Neutral
The earnings call highlighted strong revenue and earnings growth, successful integration of new investments, and robust performance of key assets like Mining Area C. However, challenges such as decreased iron ore prices, increased operational costs, and a decline in gold offtake volumes were noted. Overall, the sentiment is balanced, as the positive aspects are countered by significant challenges.
Q4-2025 Updates
Positive Updates
Revenue and Earnings Growth
A 10% increase in revenue and underlying EBITDA, with growth in net profit, driven by record production volumes at key assets and contributions from newly acquired assets.
Successful Integration of First Investment
The acquisition of assets during the year contributed $22.6 million in new revenue within 10 months of ownership.
Mining Area C Performance
Mining Area C achieved record production volumes, operating at about 2.25x its volumes from FY '21, contributing a $20 million capacity payment.
Strong Balance Sheet and Dividend Policy
A fully franked final dividend of $0.13 per share was declared, bringing the total dividend for FY '25 to $0.22 per share, with a future payout target of 75% of net profit after tax.
Gold Offtake Contracts Success
Record contributions from gold offtake contracts, amounting to $21.5 million, which helped cover incremental debt service costs.
Negative Updates
Iron Ore Price Impact
A 17% decrease in realized iron ore prices led to an 8% decline in MAC royalty revenue compared to FY '24.
Operational Costs and Expansion
Additional costs due to opening an office in Denver and supporting operations in multiple jurisdictions, partially offset by reduced external business development costs.
Gold Offtake Volume Decline
A decrease in ounces delivered in 2H '25 mainly due to the suspension of operations at Los Filos.
Company Guidance
During the Deterra Royalties Full Year FY 2025 Results Conference Call, the company announced a 10% increase in revenue and underlying EBITDA, alongside growth in net profit, driven by record production volumes at Mining Area C (MAC). MAC achieved a record 140 million wet tonnes of production, delivering a $20 million capacity payment. Additionally, new assets acquired contributed $22.6 million in revenue, with the gold offtake contracts providing $21.5 million. Deterra declared a fully franked final dividend of $0.13 per share, totaling $0.22 for the year, with a future dividend payout target of 75% of net profit after tax. The company maintains a strong financial position, with a leverage ratio of 10% and plans to focus on value-accretive investments. The Thacker Pass lithium project is highlighted as a significant long-term growth opportunity, expected to complete its first phase by late 2027.

Deterra Royalties Ltd Financial Statement Overview

Summary
Deterra Royalties Ltd shows strong financial health with impressive profitability and cash generation. Revenue growth is robust at 12.65%, and the company maintains high margins, although the slight decrease in net profit margin and high leverage are areas to monitor. The balance sheet reflects high leverage, but strong return on equity and cash flow metrics provide a solid foundation.
Income Statement
85
Very Positive
Deterra Royalties Ltd has demonstrated strong revenue growth with a 12.65% increase in the latest year, indicating robust demand for its offerings. The company maintains excellent profitability with a gross profit margin of 100% and a net profit margin of 59.1%, showcasing efficient cost management. EBIT and EBITDA margins are also high at 91.75% and 94.15%, respectively, reflecting strong operational efficiency. However, the net profit margin has slightly decreased from the previous year, which could be a point of concern if the trend continues.
Balance Sheet
70
Positive
The balance sheet shows a high debt-to-equity ratio of 2.37, indicating significant leverage, which could pose a risk if not managed properly. However, the return on equity is strong at 124.90%, suggesting that the company is effectively using its equity base to generate profits. The equity ratio is not provided, but the high leverage warrants caution despite the strong ROE.
Cash Flow
78
Positive
Cash flow analysis reveals a slight decline in free cash flow growth, but the company maintains a healthy operating cash flow to net income ratio of 37.52, indicating strong cash generation relative to net income. The free cash flow to net income ratio is also robust at 98.57%, suggesting effective conversion of profits into cash. Despite the decline in free cash flow growth, the overall cash flow position remains solid.
BreakdownTTMDec 2025Dec 2024Dec 2023Dec 2022Dec 2021
Income Statement
Total Revenue263.43M263.43M240.51M229.26M265.15M145.21M
Gross Profit253.88M263.43M231.43M220.34M257.12M140.24M
EBITDA249.13M248.03M225.56M219.34M256.78M140.37M
Net Income155.69M155.69M154.89M152.46M178.46M94.26M
Balance Sheet
Total Assets502.37M502.37M101.29M115.19M153.49M89.09M
Cash, Cash Equivalents and Short-Term Investments24.39M24.39M31.06M29.49M27.46M24.21M
Total Debt295.40M295.40M497.00K186.00K248.00K311.00K
Total Liabilities377.71M377.71M20.94M23.05M34.87M27.37M
Stockholders Equity124.66M124.66M80.35M92.14M118.63M61.72M
Cash Flow
Free Cash Flow135.35M132.95M170.09M182.23M127.81M82.12M
Operating Cash Flow135.36M134.88M170.18M182.32M127.81M82.17M
Investing Cash Flow-267.73M-267.73M-88.00K-89.00K-10.00K-24.45M
Financing Cash Flow125.82M126.30M-168.52M-180.20M-124.56M-33.51M

Deterra Royalties Ltd Technical Analysis

Technical Analysis Sentiment
Positive
Last Price4.18
Price Trends
50DMA
4.06
Positive
100DMA
3.82
Positive
200DMA
3.72
Positive
Market Momentum
MACD
0.02
Positive
RSI
52.91
Neutral
STOCH
35.91
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:DRR, the sentiment is Positive. The current price of 4.18 is below the 20-day moving average (MA) of 4.20, above the 50-day MA of 4.06, and above the 200-day MA of 3.72, indicating a neutral trend. The MACD of 0.02 indicates Positive momentum. The RSI at 52.91 is Neutral, neither overbought nor oversold. The STOCH value of 35.91 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AU:DRR.

Deterra Royalties Ltd Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
77
Outperform
AU$2.20B14.10151.89%5.30%6.54%0.48%
62
Neutral
$10.28B6.210.76%2.84%3.10%-36.03%
$1.41B-54.57%
$547.24M22.62-6.67%
$1.77B14.287.84%0.94%
$2.37B1,408.33-35.65%5.94%
46
Neutral
AU$3.04B17.84-7.26%5.71%-2.30%-234.27%
* Basic Materials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AU:DRR
Deterra Royalties Ltd
4.18
0.93
28.62%
ADMLF
Adriatic Metals Shs Chess Deposit Interests Repr 1 Sh
4.12
2.25
120.32%
BQSSF
Boss Energy
1.29
-0.38
-22.75%
ILKAF
Iluka Resources Limited
4.05
0.23
6.02%
IPGDF
IGO
3.24
-0.24
-6.90%
AU:NIC
Nickel Mines Ltd.
0.72
-0.01
-1.37%

Deterra Royalties Ltd Corporate Events

Deterra Royalties Reports Strong June Quarter with Strategic Expansion into Lithium
Jul 30, 2025

Deterra Royalties Ltd reported a strong performance for the June 2025 quarter, with a 44% increase in portfolio revenue to $89.1 million. This growth was driven by record production and sales volumes at the Mining Area C, resulting in a $20 million capacity payment, and a significant increase in net realised margins from gold offtakes. The company’s strategic expansion into lithium, through the Thacker Pass project, is expected to provide a long-term revenue stream, capitalizing on the anticipated growth in global lithium demand. The robust financial results and strategic initiatives underscore Deterra’s strong market positioning and commitment to shareholder value creation.

The most recent analyst rating on (AU:DRR) stock is a Hold with a A$4.35 price target. To see the full list of analyst forecasts on Deterra Royalties Ltd stock, see the AU:DRR Stock Forecast page.

Aware Super Becomes Substantial Holder in Deterra Royalties
Jul 4, 2025

Deterra Royalties Ltd has announced that Aware Super Pty Ltd, as trustee of Aware Super, has become a substantial holder with a 5.14% voting power in the company. This development indicates a significant interest from Aware Super in Deterra Royalties, potentially impacting the company’s shareholder dynamics and signaling confidence in its future prospects.

The most recent analyst rating on (AU:DRR) stock is a Hold with a A$4.00 price target. To see the full list of analyst forecasts on Deterra Royalties Ltd stock, see the AU:DRR Stock Forecast page.

Cooper Investors Ceases Substantial Holding in Deterra Royalties
Jul 2, 2025

Cooper Investors Pty Limited has ceased to be a substantial holder of Deterra Royalties Ltd as of July 1, 2025. This change in substantial holding could impact Deterra’s shareholder structure and influence within the market, potentially affecting stakeholder interests and the company’s strategic direction.

The most recent analyst rating on (AU:DRR) stock is a Hold with a A$3.70 price target. To see the full list of analyst forecasts on Deterra Royalties Ltd stock, see the AU:DRR Stock Forecast page.

Deterra Royalties Director Increases Shareholding
May 30, 2025

Deterra Royalties Ltd has announced a change in the director’s interest, with Alexander Morrison acquiring 2,700 ordinary fully paid shares through an on-market trade. This acquisition reflects the director’s increased investment in the company, potentially signaling confidence in the company’s future performance and stability, which could positively impact stakeholders’ perception.

The most recent analyst rating on (AU:DRR) stock is a Hold with a A$4.00 price target. To see the full list of analyst forecasts on Deterra Royalties Ltd stock, see the AU:DRR Stock Forecast page.

Deterra Royalties Reports Progress at Thacker Pass Lithium Project
May 16, 2025

Deterra Royalties Limited announced significant progress at the Thacker Pass Lithium Project in Nevada, USA, where it holds a 4.8% gross revenue royalty. The project, operated by Lithium Americas Corporation, has commenced major construction with substantial capital investments and plans for large-scale lithium carbonate production. This advancement underscores Deterra’s strategic position in the lithium market, potentially enhancing its revenue streams and market influence.

The most recent analyst rating on (AU:DRR) stock is a Hold with a A$4.00 price target. To see the full list of analyst forecasts on Deterra Royalties Ltd stock, see the AU:DRR Stock Forecast page.

Cooper Investors Acquires Substantial Stake in Deterra Royalties
May 14, 2025

Deterra Royalties Limited has announced that Cooper Investors Pty Limited has become a substantial holder in the company as of May 13, 2025. Cooper Investors now holds 26,460,470 ordinary shares, representing a 5.0028% voting power in Deterra Royalties. This development indicates a significant investment by Cooper Investors, potentially impacting Deterra’s market positioning and stakeholder interests.

The most recent analyst rating on (AU:DRR) stock is a Buy with a A$4.50 price target. To see the full list of analyst forecasts on Deterra Royalties Ltd stock, see the AU:DRR Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Sep 03, 2025