Last week, Deterra Royalties (DRR) released half-year profit results that met expectations. Revenue came in a $92.8M with a Net Profit Ater Tax of $61.7Million.
Of more importance to us was the half-year dividend, 11.68 cents. The ex-dividend date is 11/03/2022, and the payment date the 31/03/2022.
The dividend was slightly higher than the 11.52c dividend received in September 2021. The second dividend takes the grossed-up dividend yield to 7.61%, which is very healthy.
DRR achieved a slight increase in the dividend despite the sharp fall in the iron ore price from which the company generates the majority of its royalties.
DRR earned the royalty on the 49.2 million wet metric tonnes (Mwmt) shipment in the first half of 2022 from mining area C operated by BHP. Over the next few years, Mining area C’s annual production is estimated to increase to 145 Wmnt.
This increase in production should maintain the current dividend yield even if the iron ore price falls. However, if the iron ore price increases, the yield could rise to over 10%.
Trade Action
No action continue to hold without a profit target and stop loss.