Iluka Resources' (ASX:ILU) Share Price Sinks Over 50% in a Year, What’s Behind the Slide?

Highlights

• Iluka's share price has dropped by ~51% in a year and lost over 15% in past three months.
• FY24 profit after tax declined by 32.49% YoY to AUD 231.3 million amid lower zircon prices and sales volumes.
• ILU’s revenue dropped by 9.35% YoY, reaching AUD 1,170.3 million in FY24.
• Despite short-term headwinds, dividends rose by 14.29%.

Iluka Resources Ltd (ASX:ILU) is an ASX-listed company that deals in the global mineral sands sector and has seen its share price plunge by 51.08% over the past year, closing at AUD 3.84 on 21 May 2025. This drop includes a 15.79% decline over the past three months, positioning the stock near its 52-week low of AUD 3.14 (recorded on 9 April 2025).

Earnings and Revenue Decline in FY24

In the financial year 2024 (FY24), ILU’s revenue fell 9.35% YoY to AUD 1,170.3 million, while net profit after tax declined sharply by 32.49% YoY to AUD 231.3 million.

During the reported period, underlying mineral sands EBITDA reached AUD 476.90 million, continuing its downward trend from FY22, when revenue peaked at around AUD 1,486 million. Iluka attributed the decline to lower zircon prices (around 9% YoY drop) and reduced production and sales volumes due to subdued market conditions.

Capital Investments

Despite the earnings dip, Iluka significantly ramped up its capital expenditure to AUD 190 million into the Balranald and AUD 160 million into the Eneabba growth projects in FY24. Commissioning timelines of these projects extends into H2FY25 and FY27 respectively.

The substantial investments were financed partly by transitioning from a net cash position of AUD 225 million in 2023 to a net debt of AUD 115 million by the end of FY24.

Growth Strategy in Rare Earths and Strategic Partnerships

On 22 April 2025, Iluka and RareX announced a consortium to develop the Mrima Hill rare earth-niobium-phosphate-manganese project in Kenya, with the aim to develop a multi-commodity mine-to-refinery value chain linking Kenya and Australia. Iluka holds a 25% equity stake in the proposed Special Purpose Vehicle (SPV).

Additionally, a government-backed AUD 1.65 billion non-recourse loan is supporting the Eneabba refinery construction, underlining national interest in the company’s rare earth ambitions.

Outlook

Looking ahead, Iluka expects FY25 zircon sand production to increase slightly to 165 kilotonnes, up from 158 kt in FY24. Total Z/R/SR production is forecast to remain steady. The company also anticipates long-term demand growth driven by global electrification trends and Asia-Pacific expansion, particularly from China and India.

While short-term market conditions remain challenging, especially in zircon and titanium feedstocks, Iluka is betting on future structural growth and supply chain diversification to eventually drive value recovery.

Support and Resistance Summary

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, and currency, is 21 May 2025. The reference data in this report has been partly sourced from REFINITIV.

Technical Indicators Defined:

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Disclaimer

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