Deterra Royalties Limited has reported a record half-year net profit after tax of A$87.2 million, driven by strong revenue growth from its core Mining Area C royalty and successful divestment of non-core assets. The company also declared a higher fully franked interim dividend and advanced its Thacker Pass lithium project in Nevada.
- Record 1H26 NPAT up 36% to A$87.2 million
- Revenue growth led by Mining Area C royalties, up 12%
- Divestment of non-core precious metals assets for US$82 million
- Net debt reduced to A$148.8 million with A$344 million undrawn credit facilities
- Interim dividend increased 38% to 12.4 cents per share, fully franked
Strong Financial Performance
Deterra Royalties Limited has delivered a standout first half for the 2026 financial year, posting a record net profit after tax (NPAT) of A$87.2 million, a 36% increase compared to the prior corresponding period. This robust performance was underpinned by a 12% rise in revenue to A$117.2 million, primarily driven by the company’s cornerstone Mining Area C (MAC) royalty in Western Australia.
The MAC asset, operated by BHP and recognised as the world’s largest iron ore hub, achieved record sales volumes and benefited from a strong pricing environment. Production increased by 6% to 72.6 million wet metric tonnes, supporting the revenue uplift and contributing to an underlying EBITDA margin of 93%, reflecting operational efficiency and disciplined cost management.
Strategic Asset Divestments and Debt Reduction
In a decisive move to streamline its portfolio, Deterra completed the sale of non-core precious metals assets, largely acquired through the Trident Royalties acquisition, for US$82 million (approximately A$124 million). This transaction delivered a pre-tax internal rate of return of around 28%, with proceeds used to significantly reduce net debt from A$308.5 million at the end of 2024 to A$148.8 million by December 2025.
The company’s balance sheet strength is further evidenced by undrawn credit facilities of A$344 million, providing ample liquidity to pursue future growth opportunities or respond to market developments. This financial flexibility aligns with Deterra’s capital allocation strategy balancing shareholder returns, value-accretive investments, and maintaining a robust balance sheet.
Dividend Growth and Shareholder Returns
Reflecting confidence in its cash flow generation and earnings quality, Deterra declared a fully franked interim dividend of 12.4 cents per share, marking a 38% increase from the previous interim dividend. The payout ratio remains consistent at 75% of NPAT, underscoring the company’s commitment to returning value to shareholders while preserving capital for strategic initiatives.
Progress at Thacker Pass Lithium Project
Deterra’s exposure to the battery metals sector through its royalty on the Thacker Pass lithium project in Nevada continues to advance. The project, operated by Lithium Americas Corporation and supported by General Motors and the US Department of Energy (DOE), has seen significant milestones including the first drawdown of US$435 million from a US$2.23 billion DOE loan. The DOE’s 5% equity stake in both Lithium Americas and the joint venture signals strong governmental backing for this strategically important lithium development.
With approximately 80% of detailed engineering complete and US$720 million capitalised as of September 2025, construction is progressing on schedule for first lithium carbonate production targeted in late 2027. This positions Deterra to benefit from the growing demand for battery-quality lithium over the long mine life of the project.
Leadership Transition and Outlook
During the half, Deterra underwent a leadership transition with Jason Neal stepping in as Interim Managing Director and CEO following the resignation of Julian Andrews. Neal, with extensive mining sector experience and a background in metals and mining investment banking, is steering the company through this interim phase while a search for a permanent CEO is underway.
Looking ahead, Deterra remains focused on extracting value from its core royalties, advancing development assets, and selectively pursuing new royalty and financing opportunities that align with shareholder value creation. The company’s strong cash flow, reduced leverage, and strategic asset sales provide a solid foundation for sustainable growth.
Bottom Line?
Deterra’s record half-year results and strengthened balance sheet set the stage for continued growth, but investors will watch closely for the permanent CEO appointment and execution on lithium project milestones.
Questions in the middle?
- Who will be appointed as Deterra’s permanent CEO and what strategic direction will they set?
- How will the timing and scale of lithium production at Thacker Pass impact Deterra’s future royalty income?
- What new royalty or financing opportunities might Deterra pursue with its increased debt capacity?