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

PE ratio (12.4x) is below the Australian market (18.3x)

Earnings grew by 775% over the past year

Risk Analysis

Earnings are forecast to decline by an average of -6.7% per year for the next 3 years

High level of non-cash earnings

Unstable dividend track record



Snowflake Analysis

Solid track record with adequate balance sheet.


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

-1.6%

ILU

2.6%

AU Metals and Mining

0.3%

AU Market


1 Year Return

24.4%

ILU

20.3%

AU Metals and Mining

17.3%

AU Market

Return vs Industry: ILU exceeded the Australian Metals and Mining industry which returned 20.3% over the past year.

Return vs Market: ILU exceeded the Australian Market which returned 17.3% over the past year.


Shareholder returns

ILUIndustryMarket
7 Day-1.6%2.6%0.3%
30 Day3.2%3.2%-1.0%
90 Day20.5%1.0%-0.1%
1 Year27.9%24.4%29.3%20.3%23.1%17.3%
3 Year44.8%35.3%65.2%42.5%36.2%17.5%
5 Year69.7%50.4%113.2%62.9%61.4%25.0%

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?

12.42x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: ILU (A$9.28) is trading above our estimate of fair value (A$9.12)

Significantly Below Fair Value: ILU is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: ILU is good value based on its PE Ratio (12.4x) compared to the Metals and Mining industry average (12.8x).

PE vs Market: ILU is good value based on its PE Ratio (12.4x) compared to the Australian market (18.3x).


Price to Earnings Growth Ratio

PEG Ratio: ILU's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: ILU is overvalued based on its PB Ratio (3.4x) 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 9 analysts?

-6.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ILU's earnings are forecast to decline over the next 3 years (-6.7% per year).

Earnings vs Market: ILU's earnings are forecast to decline over the next 3 years (-6.7% per year).

High Growth Earnings: ILU's earnings are forecast to decline over the next 3 years.

Revenue vs Market: ILU's revenue (3.3% per year) is forecast to grow slower than the Australian market (3.6% per year).

High Growth Revenue: ILU's revenue (3.3% 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 low in 3 years time (15.5%).


Next Steps

Past Performance

How has Iluka Resources performed over the past 5 years?

33.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ILU has a high level of non-cash earnings.

Growing Profit Margin: ILU's current net profit margins (24.2%) are higher than last year (3%).


Past Earnings Growth Analysis

Earnings Trend: ILU has become profitable over the past 5 years, growing earnings by 33.6% per year.

Accelerating Growth: ILU's earnings growth over the past year (775%) exceeds its 5-year average (33.6% per year).

Earnings vs Industry: ILU earnings growth over the past year (775%) exceeded the Metals and Mining industry 7.8%.


Return on Equity

High ROE: ILU's Return on Equity (26.8%) is considered high.


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$640.4M) exceed its short term liabilities (A$280.8M).

Long Term Liabilities: ILU's short term assets (A$640.4M) do not cover its long term liabilities (A$866.2M).


Debt to Equity History and Analysis

Debt Level: ILU's debt to equity ratio (16.3%) is considered satisfactory.

Reducing Debt: ILU's debt to equity ratio has increased from 12.4% to 16.3% over the past 5 years.

Debt Coverage: ILU's debt is well covered by operating cash flow (188.4%).

Interest Coverage: ILU's interest payments on its debt are well covered by EBIT (68.8x coverage).


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 3.3x debt).


Next Steps

Dividend

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

3.13%

Current Dividend Yield


Dividend Yield vs Market

company3.1%marketbottom25%2.4%markettop25%5.6%industryaverage4.5%forecastin3Years2.7%

Current dividend yield vs market & industry

Notable Dividend: ILU's dividend (3.13%) is higher than the bottom 25% of dividend payers in the Australian market (2.42%).

High Dividend: ILU's dividend (3.13%) is low compared to the top 25% of dividend payers in the Australian market (5.56%).


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: With its reasonably low payout ratio (32.1%), ILU's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: ILU's dividends in 3 years are forecast to be covered by earnings (60.3% payout ratio).


Next Steps

Management

What is the CEO of Iluka Resources's salary, the management and board of directors tenure and is there insider trading?

3.0yrs

Average management tenure


CEO

Tom Patrick O’Leary (56yo)

3.3yrs

Tenure

AU$2,802,403

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 ($USD1.93M) is about average for companies of similar size in the Australian market ($USD2.26M).

Compensation vs Earnings: Tom's compensation has been consistent with company performance over the past year.


Management Age and Tenure

3.0yrs

Average Tenure

Experienced Management: ILU's management team is considered experienced (3 years average tenure).


Board Age and Tenure

4.5yrs

Average Tenure

57.5yo

Average Age

Experienced Board: ILU's board of directors are considered experienced (4.5 years average tenure).


Insider Trading

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


Recent Insider Transactions

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Ownership Breakdown

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


Management Team

  • Steve Wickham (60yo)

    Chief Operating Officer of Mineral Sands

    • Tenure: 5.5yrs
    • Compensation: AU$1.45m
  • Matthew Blackwell

    Head of Major Projects

    • Tenure: 5.8yrs
    • Compensation: AU$1.20m
  • Tom Patrick O’Leary (56yo)

    MD, CEO & Director

    • Tenure: 3.3yrs
    • Compensation: AU$2.80m
  • Simon Hay

    Head of Resource Development

    • Tenure: 3.8yrs
    • Compensation: AU$1.07m
  • Sue Wilson

    General Counsel & Company Secretary

    • Tenure: 3yrs
  • Adele Stratton

    Chief Financial Officer

    • Tenure: 1.3yrs
    • Compensation: AU$821.06k
  • Sarah Hodgson

    General Manager of People & Sustainability

    • Tenure: 2.6yrs
  • Julian Andrews

    Head of Strategy

    • Tenure: 2.9yrs
    • Compensation: AU$785.79k
  • Melissa Roberts

    General Manager of Investor Relations & Commercial Mineral Sands Operations

    • Tenure: 1.1yrs
  • Christian Barbier

    Head of Marketing

    • Tenure: 0yrs

Board Members

  • Jenny Seabrook (62yo)

    Independent Non-Executive Director

    • Tenure: 11.6yrs
    • Compensation: AU$195.96k
  • Greg Martin (59yo)

    Non-Executive Chairman

    • Tenure: 6yrs
    • Compensation: AU$340.12k
  • Marcelo De Almeida Bastos (56yo)

    Independent Non-Executive Director

    • Tenure: 5.8yrs
    • Compensation: AU$160.05k
  • Rob Cole (56yo)

    Independent Non-Executive Director

    • Tenure: 1.8yrs
    • Compensation: AU$144.69k
  • Hutch Ranck (71yo)

    Independent Non-Executive Director

    • Tenure: 6.9yrs
    • Compensation: AU$192.54k
  • Tom Patrick O’Leary (56yo)

    MD, CEO & Director

    • Tenure: 3.3yrs
    • Compensation: AU$2.80m
  • Susie Corlett

    Independent Non-Executive Director

    • Tenure: 0.5yrs
  • Lynne Saint

    Independent Non-Executive Director

    • Tenure: 0.2yrs

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$3.920b
  • Shares outstanding: 422.44m
  • 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 Australia, Sierra Rutile, United St ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/13 10:32
End of Day Share Price2019/12/13 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


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.