PERTH (miningweekly.com) – Mineral sands miner Iluka has seen its revenue and profit decline in the first half of the year, despite sales volumes increasing by nearly 5%.

Net profit after tax plunged by 87.5% to $34.3-million, from $274.4-million reported in the first half of 2012, and revenue fell 42.4% year-on-year to $381.7-million.

Iluka told shareholders on Wednesday that the lower revenue and net profit for the period was a result of the lower received prices.

The average revenue per tonne received for the first half of the year was $1 178/t, compared with the $2 255/t received in the first half of 2012, and $1 655/t received in the second half of that year.

During the first six months of 2013, Iluka sold a combined volume of 287 200 t of zircon, rutile and synthetic rutile, while production came in at 238 100 t. This compared with the 443 800 t produced in the first half of 2012 and the 273 900 t sold.

Iluka noted that the lower production and recovery in zircon sales allowed the finished goods inventory to be drawn down to the value of $20.2-million, while work-in-progress product increased in value by $61-million, with an adjustment in stores value of $2.6-million, resulting in a $38.2-million increase in total inventories of $818.7-million at the end of June.

The ASX-listed mineral sands miner has increased a progressive recovery in zircon demand over 2013 and 2014, adding that the pace of recovery to date, had exceeded its initial expectations, reflecting improvements in business confidence and run rates, as well as some replenishments in inventories from highly depleted levels.

For the remainder of 2013, Iluka was expecting a more even half-to-half profile, instead of the typically second-half weighted sales profile. Based on the strong first half, Iluka expected that zircon sales in 2013 would exceed production, which has been increased to some 280 000 t.