Iluka Resources Ltd Enhanced Volumes To Offset Pricing Pressure
Enhanced volumes to offset pricing pressure: The shares of Iluka Resources Ltd (ASX: ILU) surged 14.61% (as of February 24, 2016) in just last four weeks as the group was able to improve its volumes by controlling costs to offset the ongoing commodity prices turmoil. ILU delivered a sales revenue rise for zircon, rutile, and synthetic rutile (Z/R/SR) by 17% yoy to $740 million in FY15 while sales volumes rose by 6% to 651 kt and overall annual production increased to 690 thousand tonnes (kt) during the period. Despite delivering such volumes, ILU was able to cut its unit cash costs for Z/R/SR production by 17% during the year to $558/tonne against $668/tonne in 2014. The group is enhancing its free cash flow by decreasing its capital expenditure while maintaining its EBITDA margin at >30%. Falling Australian dollar, coupled with the group’s pipeline development and ongoing cost control might drive the stock further in the coming months. Accordingly, we recommend investors to “HOLD” this dividend yield stock at the current price of $6.63 To read the complete report click here . To get your free report Click Here
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