Hi had a look through the balance sheet and Iluka seems to be a FCF machine. Noted that in 3 months this year, some 60-70 million debt has been paid off, and the very high D&A means significant FCF.
Looking at the pricing outcomes, with zircon increasing 40% and rutile 70-75%, I am guessing that revenue will increase in the order of at least 50% from last annual report in March based on product mix (though I suspect it will be significantly more than that), which also doesn't account for the slightly increased production.
a 50% increase on 900 million gives 1.35 billion, and even if operating costs balloon up 20% gives some 735million operating cashflow. Add another 75 for mining area C gives 800 million operating cashflow. NPAT may be as low as 600 due to the very high D&A, but it still means very attractive valuation multiples. (current EV ~ 7 billion).
Also, does anyone the long-term pricing outlook for zircon/rutile and whether supply will signicantly affect the long-term prices of zircon/rutile (5-10 years)?
Thanks in advance for any help,
ILU Price at posting:
$16.52 Sentiment: LT Buy Disclosure: Not Held
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