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Iluka Resources Limited
(Sydney:ILU)
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Rating:54Neutral
Price Target:
AU$7.00
▲(18.85% Upside)
Action:Reiterated
Date:08/19/26
Overall score is held back primarily by weakened financial performance (losses, higher leverage, and negative operating/free cash flow in 2025). This is partially offset by a more positive near-term setup from technical indicators and a supportive earnings-call update featuring strong H1 cash generation, debt reduction, and constructive pricing/project progress. Valuation is also constrained by the negative P/E and only modest dividend yield.
Positive Factors
Cash Generation and Debt Reduction
Strong first-half cash generation and a substantial reduction in mineral sands net debt improve financial flexibility. This provides greater capacity to fund projects, absorb operating volatility and reduce dependence on external financing.
Negative Factors
Weak Earnings and Cash Flow Trend
The sharp reversal from prior profitability and positive cash generation signals meaningful earnings volatility. Persistently weaker margins or renewed cash burn could constrain investment, increase funding needs and reduce resilience through the cycle.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash Generation and Debt Reduction
Strong first-half cash generation and a substantial reduction in mineral sands net debt improve financial flexibility. This provides greater capacity to fund projects, absorb operating volatility and reduce dependence on external financing.
Read all positive factors
Iluka Resources Limited (ILU) vs. iShares MSCI Australia ETF (EWA)
Market Cap
AU$3.09B
Dividend Yield0.7%
Average Volume (3M)3.47M
Price to Earnings (P/E)―
Beta (1Y)2.12
Revenue Growth-13.24%
EPS Growth-223.96%
CountryAU
Employees1,000
SectorBasic Materials
Sector Strength58
IndustryIndustrial Materials
Share Statistics
EPS (TTM)-0.67
Shares Outstanding431,195,000
10 Day Avg. Volume4,199,919
30 Day Avg. Volume3,471,630
Financial Highlights & Ratios
PEG Ratio0.04
Price to Book (P/B)1.20
Price to Sales (P/S)2.45
P/FCF Ratio-2.77
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
AU$7.62Price Target Upside29.32% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)-0.28
Revenue Forecast (FY)AU$803.34M
Iluka Resources Limited Business Overview & Revenue Model
Company Description
Headquartered in Perth, Australia, and established in 1954, Iluka Resources Limited is deeply involved in all facets of the mineral sands industry. This encompasses the exploration, development, extraction, processing, marketing, and subsequent re...
How the Company Makes Money
Iluka primarily makes money by selling mineral sands products into global industrial supply chains. Its main revenue stream is product sales of zircon and titanium feedstocks (including ilmenite, rutile, and synthetic rutile) produced from its min...
Iluka Resources Limited Earnings Call Summary
Earnings Call Date:Aug 18, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Feb 23, 2027
Earnings Call Sentiment Positive
The call presented several strong operational and financial positives: robust cash generation, a 42% reduction in mineral sands net debt, successful milestones at Balranald and substantial progress at the Eneabba refinery (60% complete and on-budget), plus initial rare earths commercial agreements. Offsetting these were notable execution challenges at Balranald that delayed consistent extraction rates, a statutory loss driven by inventory movements and idle charges, idled synthetic rutile capacity with uncertain restart timing, and mixed end-market demand (particularly in China). On balance, the positive cash, balance-sheet and commercial progress materially outweigh the operational and timing headwinds, but execution risks and demand softness warrant continued monitoring.Positive Updates
Strong cash generation and balance sheet improvement
Mineral sands business generated $247 million of operating cash flow and $200 million of free cash flow in H1 2026. Mineral sands net debt reduced by 42% to $273 million at 30 June.
Negative Updates
Statutory loss and inventory/idle charges
Reported a statutory loss for the period that includes $156 million of cash and non-cash inventory movements and $41 million of idle charges related to previously flagged idled assets.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong cash generation and balance sheet improvement
Mineral sands business generated $247 million of operating cash flow and $200 million of free cash flow in H1 2026. Mineral sands net debt reduced by 42% to $273 million at 30 June.
Read all positive updates
Company Guidance
Guidance from the call highlighted that contracted sand prices rose to around $1,760 per tonne for Q3 and are expected to broadly hold at that level for the remainder of the year; mineral sands cash costs for 2026 are now guided to about $380 million and full‑year mineral sands CapEx to $115 million (H1 CapEx was $94 million, including $35 million reclassified from operating costs). The mineral sands business generated $247 million of operating cash flow and $200 million of free cash flow in H1, reducing mineral sands net debt by 42% to $273 million at 30 June; statutory results included $156 million of inventory movements and $41 million of idle charges. Inventories were drawn down (finished goods down ~74,000 tonnes of zircon sand and ~37,000 tonnes of synthetic rutile), Balranald has 2 rigs operational with first HMC shipment to Narngulu scheduled for September and ramping to target extraction rates expected in calendar 2027, and Eneabba refinery is 60% complete with total capex reaffirmed at $1.7–$1.8 billion, mineral commissioning slated for 2027, full access to a $1.65 billion EFA loan, and an Iluka equity contribution package of $214 million (including ~$82 million working capital expected in early 2027).Iluka Resources Limited Financial Statement Overview
Summary
Income Statement
44
Neutral
Balance Sheet
57
Neutral
Cash Flow
24
Negative
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.02B | 1.17B | 1.29B | 1.61B | 1.32B |
| Gross Profit | 82.70M | 478.30M | 643.80M | 968.80M | 920.20M |
| EBITDA | 144.80M | 503.50M | 647.10M | 867.00M | 682.40M |
| Net Income | -288.40M | 231.30M | 342.60M | 584.50M | 365.80M |
Balance Sheet | |||||
| Total Assets | 4.23B | 3.74B | 3.33B | 3.20B | 2.80B |
| Cash, Cash Equivalents and Short-Term Investments | 45.70M | 136.00M | 364.90M | 521.70M | 294.80M |
| Total Debt | 1.14B | 291.30M | 163.70M | 62.50M | 35.90M |
| Total Liabilities | 2.16B | 1.38B | 1.17B | 1.30B | 1.21B |
| Stockholders Equity | 2.07B | 2.36B | 2.16B | 1.89B | 1.59B |
Cash Flow | |||||
| Free Cash Flow | -896.30M | -310.60M | -191.80M | 484.60M | 316.10M |
| Operating Cash Flow | -34.20M | 123.30M | 89.60M | 637.20M | 369.70M |
| Investing Cash Flow | -842.10M | -402.90M | -240.80M | -172.50M | -51.70M |
| Financing Cash Flow | 785.10M | 52.60M | -5.40M | -134.10M | -112.90M |
Iluka Resources Limited Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
54 Neutral | AU$3.09B | -10.70 | -12.75% | 0.84% | -13.24% | -223.96% | |
48 Neutral | AU$354.22M | -11.36 | -63.51% | ― | ― | 12.13% | |
42 Neutral | AU$21.74M | -0.25 | -158.13% | ― | ― | -777.65% | |
38 Underperform | AU$1.28B | -14.38 | -35.30% | ― | ― | -50.75% |
* Basic Materials Sector Average
AU:ILU
Iluka Resources Limited
7.09
1.01
16.57%
AU:IMA
Image Resources NL
0.02
-0.06
-75.64%
AU:SVM
Sovereign Metals Limited
0.54
-0.20
-27.70%
AU:IPX
Iperionx Limited
3.28
-2.64
-44.59%
Iluka Resources Limited Corporate Events
Iluka Cuts Net Debt as Balranald Mine and Eneabba Rare Earths Refinery Advance
Aug 18, 2026
Iluka reported 2026 half-year mineral sands revenue of $433 million, down from the prior year, but delivered stronger operating and free cash flow that enabled a sharp reduction in net debt to $273 million. Supported by higher zircon prices and in...
Iluka Resources Declares Semi‑Annual Dividend for June 2026 Period
Aug 18, 2026
Iluka Resources has declared a semi‑annual dividend of AUD 0.03 per ordinary fully paid share for the six‑month period ended 30 June 2026. The announcement underscores the company’s continued practice of returning capital to shar...
Iluka Releases Auditor-Reviewed Interim Report for Half-Year 2026
Aug 18, 2026
Iluka Resources Limited has released its interim report for the half-year ended 30 June 2026, providing a detailed review of financial results, operations and governance over the period. The report includes condensed consolidated financial stateme...
Iluka lifts zircon sales and prices as rare earths capex drives debt higher
Jul 27, 2026
Iluka reported Q2 2026 production of 58kt of zircon, rutile and synthetic rutile, with Narngulu processing Jacinth-Ambrosia concentrate while synthetic rutile kilns remained idle. Sales of these products surged to 157kt, driven by stronger zircon ...
Iluka updates market on cessation of ILUAA rights securities
Jul 9, 2026
Iluka Resources Limited has notified the market of the cessation of certain rights securities, identified under the ASX code ILUAA. The announcement details that a total of 57,904 rights have lapsed or otherwise ceased on 23 June and 30 June 2026,...
Iluka issues new unquoted rights under employee incentive scheme
Jul 9, 2026
Iluka Resources has issued additional unquoted equity securities under its employee incentive scheme, allocating a total of 98,425 rights in two tranches dated 24 April and 26 June 2026. The move underscores the company’s ongoing use of equi...
Iluka Issues 126,943 New Shares on Conversion of Unquoted Securities
Jul 9, 2026
Iluka Resources Limited has issued 126,943 fully paid ordinary shares following the exercise or conversion of unquoted equity securities. The new shares were issued on 23 June 2026, and the company notified the ASX of this change on 9 July 2026.Th...
Iluka seals first rare earths offtake with global auto group
Jun 22, 2026
Iluka Resources has signed a binding, multi-year take-or-pay offtake agreement to supply magnet rare earth oxides, including neodymium, praseodymium, dysprosium and terbium, to a major global automotive manufacturer starting in 2028. The contract,...
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.