ASX:ILU

Stock Analysis Report

Executive Summary

Iluka Resources Limited engages in the exploration, project development, mining, processing, marketing, and rehabilitation of mineral sands.

Rewards

Trading at 18.2% below its fair value

Earnings are forecast to grow 76.09% per year

Risk Analysis

No risks detected for ILU from our risk checks.


Snowflake Analysis

Excellent balance sheet with reasonable growth potential.


Similar Companies

Share Price & News

How has Iluka Resources's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: ILU has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0.1%

ILU

0.8%

AU Metals and Mining

0.7%

AU Market


1 Year Return

1.1%

ILU

6.2%

AU Metals and Mining

15.5%

AU Market

Return vs Industry: ILU underperformed the Australian Metals and Mining industry which returned 6.2% over the past year.

Return vs Market: ILU underperformed the Australian Market which returned 15.5% over the past year.


Shareholder returns

ILUIndustryMarket
7 Day0.1%0.8%0.7%
30 Day-0.6%-5.1%0.8%
90 Day3.4%5.9%6.1%
1 Year3.9%1.1%11.7%6.2%20.6%15.5%
3 Year48.0%38.3%55.5%36.4%38.1%19.7%
5 Year37.0%21.4%85.7%41.9%51.8%17.9%

Price Volatility Vs. Market

How volatile is Iluka Resources's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Iluka Resources undervalued compared to its fair value and its price relative to the market?

18.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ILU (A$9.54) is trading below our estimate of fair value (A$11.67)

Significantly Below Fair Value: ILU is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: ILU is unprofitable, so we can't compare its PE Ratio to the Metals and Mining industry average.

PE vs Market: ILU is unprofitable, so we can't compare its PE Ratio to the Australian market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate ILU's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: ILU is overvalued based on its PB Ratio (5.7x) compared to the AU Metals and Mining industry average (1.4x).


Next Steps

Future Growth

How is Iluka Resources forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

76.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ILU is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.1%).

Earnings vs Market: ILU is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: ILU's is expected to become profitable in the next 3 years.

Revenue vs Market: ILU's revenue (3.7% per year) is forecast to grow slower than the Australian market (4.1% per year).

High Growth Revenue: ILU's revenue (3.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ILU's Return on Equity is forecast to be high in 3 years time (27.6%)


Next Steps

Past Performance

How has Iluka Resources performed over the past 5 years?

22.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ILU is currently unprofitable.

Growing Profit Margin: ILU is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: ILU is unprofitable, but has reduced losses over the past 5 years at a rate of 22% per year.

Accelerating Growth: Unable to compare ILU's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: ILU is unprofitable, making it difficult to compare its past year earnings growth to the Metals and Mining industry (16.7%).


Return on Equity

High ROE: ILU has a negative Return on Equity (-42.12%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Iluka Resources's financial position?


Financial Position Analysis

Short Term Liabilities: ILU's short term assets (A$638.0M) exceed its short term liabilities (A$362.4M).

Long Term Liabilities: ILU's short term assets (A$638.0M) do not cover its long term liabilities (A$820.4M).


Debt to Equity History and Analysis

Debt Level: ILU's debt to equity ratio (7.6%) is considered satisfactory.

Reducing Debt: ILU's debt to equity ratio has reduced from 11.2% to 7.6% over the past 5 years.


Balance Sheet

Inventory Level: ILU has a high level of physical assets or inventory.

Debt Coverage by Assets: ILU's debt is covered by short term assets (assets are 11.8x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: Whilst unprofitable ILU has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: ILU is unprofitable but has sufficient cash runway for more than 3 years, due to free cash flow being positive and growing by 11.2% per year.


Next Steps

Dividend

What is Iluka Resources's current dividend yield, its reliability and sustainability?

1.36%

Current Dividend Yield


Dividend Yield vs Market

company1.4%marketbottom25%2.3%markettop25%5.4%industryaverage4.4%forecastin3Years3.2%

Current dividend yield vs market & industry

Notable Dividend: ILU's dividend (1.36%) isn’t notable compared to the bottom 25% of dividend payers in the Australian market (2.3%).

High Dividend: ILU's dividend (1.36%) is low compared to the top 25% of dividend payers in the Australian market (5.35%).


Stability and Growth of Payments

Stable Dividend: ILU has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: ILU's dividend payments have increased, but the company has only paid a dividend for 9 years.


Current Payout to Shareholders

Dividend Coverage: ILU is paying a dividend but the company is unprofitable.


Future Payout to Shareholders

Future Dividend Coverage: ILU's dividends in 3 years are forecast to be covered by earnings (71.8% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.2yrs

Average management tenure


CEO

Tom Patrick O’Leary (56yo)

3.4yrs

Tenure

AU$3,181,077

Compensation

Mr. Tom J. P O'Leary, LLB, B.Juris, has been the Chief Executive Officer and Managing Director of Iluka Resources Limited since September 5, 2016. Mr. O'Leary served as Managing Director of Wesfarmers Chem ...


CEO Compensation Analysis

Compensation vs Market: Tom's total compensation ($USD2.10M) is about average for companies of similar size in the Australian market ($USD2.17M).

Compensation vs Earnings: Tom's compensation has increased whilst the company is unprofitable.


Leadership Team

NamePositionTenureCompensationOwnership
Thomas Patrick O’Leary
MD, CEO & Director3.4yrsAU$3.18m0.071% A$2.9m
Adele Stratton
Chief Financial Officer1.5yrsAU$965.34k0.0033% A$132.9k
Christian Barbier
Head of Marketing0yrsAU$854.43kno data
Matthew Blackwell
Head of Major Projects6yrsAU$1.22m0.015% A$605.7k
Steven Wickham
Chief Operating Officer of Mineral Sands5.7yrsAU$1.46m0.017% A$666.1k
Simon Hay
Head of Resource Development3.9yrsAU$550.83k0.016% A$635.5k
Julian Andrews
Head of Strategy3.1yrsAU$843.74k0.0011% A$45.1k
Melissa Roberts
General Manager of Investor Relations & Commercial Mineral Sands Operations1.3yrsno datano data
Susan Wilson
General Counsel & Company Secretary3.2yrsno datano data
Sarah Hodgson
General Manager of People & Sustainability2.8yrsno datano data

3.2yrs

Average Tenure

Experienced Management: ILU's management team is considered experienced (3.2 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Thomas Patrick O’Leary
MD, CEO & Director3.4yrsAU$3.18m0.071% A$2.9m
Jennifer Seabrook
Independent Non-Executive Director11.8yrsAU$193.17k0.0049% A$195.7k
Gregory John Martin
Independent Non-Executive Chairman6.2yrsAU$342.17k0.0071% A$285.9k
Marcelo De Almeida Bastos
Independent Non-Executive Director6yrsAU$160.86k0.0034% A$136.9k
Robert Cole
Independent Non-Executive Director1.9yrsAU$157.84k0.0028% A$114.4k
James Ranck
Independent Non-Executive Director7.1yrsAU$189.41k0.0030% A$121.6k
Susan Corlett
Independent Non-Executive Director0.7yrsAU$93.83k0.0013% A$53.2k
Lynne Saint
Independent Non-Executive Director0.3yrsAU$30.31kno data

4.7yrs

Average Tenure

56yo

Average Age

Experienced Board: ILU's board of directors are considered experienced (4.7 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Iluka Resources Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Iluka Resources Limited
  • Ticker: ILU
  • Exchange: ASX
  • Founded: 1954
  • Industry: Diversified Metals and Mining
  • Sector: Materials
  • Market Cap: AU$4.027b
  • Shares outstanding: 422.11m
  • Website: https://www.iluka.com

Number of Employees


Location

  • Iluka Resources Limited
  • 240 St Georges Terrace
  • Level 17
  • Perth
  • Western Australia
  • 6000
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ILKA.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
ILUASX (Australian Securities Exchange)YesOrdinary SharesAUAUDJan 1992
ILZDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
ILUCHIA (Chi-X Australia)YesOrdinary SharesAUAUDJan 1992
ILKA.YOTCPK (Pink Sheets LLC)UNSPONSORD ADRUSUSDDec 2008

Biography

Iluka Resources Limited engages in the exploration, project development, mining, processing, marketing, and rehabilitation of mineral sands. The company operates through Jacinth-Ambrosia/Mid West, Cataby/South West, Sierra Rutile, Mining Area C, and United States/Murray Basin segments. It produces zircon; titanium dioxide products of rutile and synthetic rutile; and ilmenite, as well as activated carbon and iron concentrate products. The company’s products are used in home, workplace, medical, lifestyle, and industrial applications. It has operations in Australia, China, rest of Asia, Europe, the Americas, and internationally. The company was formerly known as Westralian Sands Limited and changed its name to Iluka Resources Limited in May 1999. Iluka Resources Limited was founded in 1954 and is headquartered in Perth, Australia. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/21 10:32
End of Day Share Price2020/02/21 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.