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Low sales undermine Iluka’s shares

PUBLISHED: 1 hour 6 MINUTES AGO | UPDATE: 1 hour 6 MINUTES AGO

Mineral sands miner Iluka Resources has posted a 58 per cent fall in third quarter sales revenue due to lower production and demand.

By 11.27am AEDT its shares had fallen 82 cents, or 8.51 per cent, to $8.82.

Iluka said on Thursday its sales revenue in the three months to September 30 was $224.5 million, down from $532.5 million in the same period in the previous year.

Sales revenue in the nine months to September 30 of $887.3 million was down 19.5 per cent from the previous corresponding period.

Its shares fell immediately on the update, down 59 cents, or 6.1 per cent, at $9.05 at 10.33am.

The revenue fall reflects lower demand for zircon and high grade titanium dioxide products, which had been a feature of 2012, Iluka said.

Zircon is used in ceramic tiles, and titanium dioxide is used in pigments for paints, plastics and paper.

Sales in the three months to September were hit by the northern summer holiday period, when customers closed their production facilities for extended periods, Iluka said.

Production in the three months to September was lower than in the previous corresponding period, in line with the company's strategy to cut production in line with demand.

Combined zircon, rutile and synthetic rutile production in the three months to September was 202,100 tonnes, down 35 per cent from the same period in the previous year.

For the year to September, production was 645,900 tonnes, down 27 per cent from the previous corresponding period.


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