Deterra Royalties Posts $63.9M Profit, Declares 9c Dividend Amid Market Shifts

Robust Half-Year Performance Amid Commodity Price Volatility

Deterra Royalties Limited has released its half-year results for the six months ending December 2024, reporting a net profit after tax (NPAT) of $63.9 million. While this represents a decline from the $78.7 million recorded in the prior corresponding period, the result underscores the resilience of Deterra's royalty business model amid fluctuating commodity prices.

The company’s flagship asset, the Mining Area C (MAC) iron ore royalty, delivered record production volumes from the Central Pilbara hub. This strong operational performance partially offset the impact of lower realised iron ore prices, which fell to an average of AUD 132 per dry metric tonne, down from AUD 164 in the previous half-year. The MAC royalty revenue declined 12% to $104 million, reflecting this price pressure despite a 13% increase in sales volumes to 63.6 million dry metric tonnes.

Gold Offtakes and New Revenue Streams Bolster Earnings

Deterra’s gold offtake contracts contributed positively, delivering record ounces of 193,600 and generating a net margin of $7.2 million. The realised gold price surged to an average of US$2,577 per ounce, supporting a realised margin of approximately 1.4%. This diversification into precious metals revenue streams helped mitigate the iron ore price headwinds and contributed to an underlying EBITDA of $106 million, down just 7% year-on-year.

The integration of the Trident portfolio, completed in September 2024, has begun to yield operating cost synergies estimated at $4-5 million annually. Despite one-off transaction costs of $12 million related to the acquisition, Deterra remains cash flow positive when excluding these items, highlighting operational discipline and effective cost management.

Strong Balance Sheet and Capital Management

Deterra maintains a strong balance sheet with net debt of $308 million, comfortably within its target leverage range of 0-15% of enterprise value. The company has access to $500 million in revolving credit facilities, with $186 million undrawn, providing substantial liquidity to pursue value-accretive investments. Cash on hand stood at $5.5 million as of December 31, 2024.

Reflecting confidence in its financial position, Deterra declared a fully franked interim dividend of 9.0 cents per share, representing a payout ratio of approximately 74.5%. The board retains discretion over future dividend payments, balancing shareholder returns with investment capacity and debt management.

Strategic Outlook and Growth Optionality

Looking ahead, Deterra is focused on disciplined investment in high-quality, long-life royalty assets. Key development projects include the Thacker Pass lithium royalty in the United States, where recent funding milestones and an expanded production plan position the asset for significant growth. The La Preciosa silver-gold project in Mexico is expected to commence underground processing in the second half of 2025, adding further optionality to the portfolio.

Deterra’s business model offers lower operational risk compared to direct mining exposure, while retaining upside leverage to commodity price cycles and mine expansions. The company’s strategy emphasizes diversification across commodities, geographies, and project stages, aiming to build scale and liquidity that support ongoing value creation.