Deterra Royalties (ASX:DRR) H1FY25 Revenue Impacted by Iron Ore Prices, Eyes Growth from Diversification

Highlights

• DRR’s H1FY25 revenue declined by 5.55% YoY to AUD 112.30 million, primarily due to a 22% YoY drop in realised iron ore prices from its Mining Area C (MAC).
• The company recorded underlying net profit after tax of AUD 68.5 million for the period, reflecting a decline of nearly 13% from the prior year.
• DRR reported progress at the Thacker Pass Lithium Project, targeting Phase 1 completion in late 2027.

Deterra Royalties Ltd (ASX:DRR) is a Perth-based resource royalty company with offtake agreements and royalties across 11 countries and six commodities. The company is committed to provide offering lower-risk exposure to mining via royalties, streaming agreements, or the acquisition of existing instruments.

In the first half of the financial year 2025 (H1FY25), the company’s revenue declined by 5.55% YoY to AUD 112.30 million, primarily due to a 22% YoY drop in realised iron ore prices from its Mining Area C (MAC) royalty, despite a 13% increase in sales volumes. During the reported period, underlying net profit after tax fell by 12.96% YoY to AUD 68.5 million and basic earnings per share declined by 18.80% YoY to 12.09 cents, down from 14.89 cents. However, DRR maintained an underlying EBITDA margin of 94%, supporting cash flow and enabling a fully franked interim dividend of 9.0 cents per share.

In H1FY25, the company diversified its portfolio with the acquisition of Trident Resources, which introduced new revenue streams from gold, lithium and metal offtakes.

Recent Business Update

Through an ASX update dated 16 May 2025, DRR provided an update on the Thacker Pass Lithium Project in Nevada where it holds a 4.8% gross revenue royalty, reducing to 1.05% after a partial buyback. Construction is progressing, with USD 78.2 million invested in Q1 and first steel installation expected by September 2025, supported by USD 291.6 million in joint venture contributions.

Company Outlook

Deterra expects stable royalty revenue in FY25, supported by growing volumes at MAC despite lower iron ore prices, including contributions from the ramp-up of the South Flank mine. The company sees growth in 2025, underpinned by stable production volumes and demand for critical minerals like lithium. Furthermore, expansion into other royalties and gold offtakes is offering incremental revenue and margin diversification, decreasing reliance on iron ore price cycles.

Share performance of DRR

DRR shares closed 1.04% higher at AUD 3.89 on 11 June 2025. Over the past month, the stock has gained 4.57%, while the year-to-date return stands at 4.57%. However, the stock has declined by 1.27% over six months and is down 13.17% on a 12-month basis.

The company’s shares hit a 52-week high of AUD 4.55 on 11 June 2024 and a 52-week low of AUD 3.19 on 9 April 2025.

Support and Resistance Summary

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, and currency, is 11 June 2025. The reference data in this report has been partly sourced from REFINITIV.

Technical Indicators Defined:

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Disclaimer

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