Iluka's revenues fall along with prices

A tough mineral sands market continues to make life difficult for miner Iluka Resources, whose revenues fell in 2014

Weak prices continue to hurt mineral sands miner Iluka Resources which has revealed another fall in annual revenue.

The miner was nearly the best performer on the ASX in 2011 and remains among the 50 biggest companies on the index.

However, it has struggled since as demand has fallen for its titanium dioxide and zircon products used in applications including paint pigments, ceramics, television glass and industrial metals and chemicals.

On Thursday, Iluka shares dropped 16 cents, or 2.5 per cent, to $6.29.

Iluka has revealed double digit percentage falls in the prices it received for key products zircon, rutile and synthetic rutile, with the latter two used for titanium dioxide.

The company provided little guidance to 2015, other than to predict a slow start to zircon sales as is often the case leading into the Chinese new year.

"The company has previously conveyed details of variable demand conditions across markets for zircon in 2014, and indicators for a potential recovery in demand for high grade titanium dioxide feedstocks," it said.

"This is reflected in full year sales volumes, which show slightly lower overall zircon sales volumes and an increase in rutile and synthetic rutile sales volumes relative to 2013 levels."

Iluka lifted production of zircon, rutile and synthetic rutile by 13.5 per cent to 535,000 tonnes in 2014.

Sales volumes rose five per cent to 616,000 tonnes.

However, sales revenues fell five per cent to $725 million.

Demand for zircon was weaker in Europe, the Middle East and India but strong in Asia and North America.

The company was challenged by increasing competition in the pigments market as the key Chinese property market has weakened.

It is in talks with one competitor, Kenmare Resources, about a possible takeover.


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Source: AAP


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