Iluka Resources Limited (ASX: ILU) shares are among the top performers on the ASX 200 (INDEXASX: XJO) this morning, with shares rising more than 5% on a quarterly review.
About Iluka
Iluka is a resources and mining company focused on minerals zircon, rutile and synthetic rutile which are used in ceramics, pigments and optical equipment, among other uses. Headquartered in Perth, Iluka has been operating for over 60 years, and currently operates in Australia and Sierra Leone.
Results Highlights
Iluka shares have been rising this morning after the company reported a 17% increase in production in Q3 2019. Synthetic rutile production was flat during the quarter while rutile production increased 18% compared to Q2 and zircon production increased by 29%.
Despite the growth during the quarter, year-to-date mineral sands production remains down nearly 15% from this time last year. Total sales are down 26.6%, but higher prices have resulted in revenue falling only 13.8%.
Year-to-date mineral sands revenue currently sits at $798 million. Also reflecting the higher commodity prices is the year-to-date revenue per tonne, which is up 22% from last year.
Net debt at 30th September was $89 million, down from $142 million at 30th June.
Time To Buy Iluka Shares?
Despite the rising share price, this report doesn’t really make me excited about Iluka shares. It’s encouraging to see production increased during the quarter and debt reduced, but the company still faces headwinds with global economic and trade uncertainties.
With year-to-date production and sales experiencing significant declines, the only figure which seems to have improved is the price of zircon and rutile.
I’d rather avoid the uncertainty of commodity prices and invest in the growth companies in the free report below.
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Disclosure: At the time of writing, Max does not have a financial interest in any of the companies mentioned.
