Red Hill Minerals reports a profitable FY25 with robust royalty income from the Onslow Iron Project, declaring a fully franked final dividend of 6.5 cents per share.
- FY25 total income of A$16.04 million including A$11.88 million from Onslow Iron royalties
- Profit after tax of A$9.13 million and net cash increase of A$42.07 million
- Final fully franked dividend of 6.5 cents per share declared
- Dividend policy targets semi-annual payments at 50% of royalty revenue
- FY26 royalty revenue expected to nearly double to approximately A$28.7 million
A Year of Financial Strength
Red Hill Minerals Limited has closed FY25 on a high note, reporting a profitable year driven primarily by its royalty interests in the Onslow Iron Project. The company posted total income of A$16.04 million, with royalty revenue from Onslow contributing a substantial A$11.88 million. This strong performance translated into a profit after tax of A$9.13 million and a significant net cash position increase of A$42.07 million.
Reflecting this robust financial footing, Red Hill’s board has declared a fully franked final dividend of 6.5 cents per ordinary share, continuing its commitment to returning value to shareholders. Over the course of FY25, the company paid three fully franked dividends totaling A$117.35 million, underscoring its disciplined dividend policy.
Royalty Revenue and Production Ramp-Up
The backbone of Red Hill’s revenue stream remains the Onslow Iron Project, where production steadily ramped up towards its nameplate capacity of 35 million tonnes per annum (Mtpa) during FY25. This increase in output directly boosted royalty income, with expectations that FY26 will see production maintained at full capacity.
Looking ahead, Red Hill anticipates royalty revenue from Onslow to reach approximately A$28.7 million in FY26, nearly doubling the previous year’s figure. This projection is based on current iron ore prices, exchange rates, and operational assumptions, though the company cautions that fluctuations in these variables could see revenue range between A$23 million and A$34.9 million.
Dividend Policy and Strategic Outlook
Red Hill has formalized a dividend policy targeting semi-annual payments equivalent to 50% of royalty revenue, signaling confidence in the sustainability of its cash flows. Executive Chairman Joshua Pitt highlighted the company’s progress in diversifying its royalty base and exploration portfolio, emphasizing the strength of the management team to deliver continued growth.
While the company’s royalty income is inherently tied to commodity price cycles and currency movements, Red Hill’s strategy of leveraging stable royalty streams positions it well to navigate market volatility. Investors will be watching closely how the company balances dividend returns with reinvestment in exploration and potential new royalty assets.
Looking Forward
As Red Hill Minerals moves into FY26, the market will be keen to see if the Onslow Iron Project can sustain its production at nameplate capacity and how iron ore market dynamics evolve. The company’s ability to maintain or grow dividends amid these variables will be a key indicator of its financial health and strategic execution.
Bottom Line?
Red Hill’s strong FY25 results and clear dividend policy set the stage for a pivotal FY26 as iron ore royalties take centre stage.
Questions in the middle?
- Can Red Hill sustain the Onslow Iron Project’s production at full capacity throughout FY26?
- How will fluctuations in iron ore prices and exchange rates impact future royalty revenues?
- What new royalty or exploration opportunities might Red Hill pursue to diversify income streams?