The Iluka Resources (ASX:ILU) share price has fallen more than 15 per cent since the beginning of August despite the mineral sands miner reporting first half underlying EBITDA increased 80 per cent to $279 million.
Writing in its August 2018 monthly update, the top performing Yarra Emerging Leaders Fund said profits were below expectations, with Iluka guiding to higher costs for the full year.
The fund said Iluka expects operating costs to increase by 11 per cent, and it increased its capital expenditure for Sierra Rutile by 50 per cent.
More positively, Iluka announced it was inceasing rutile prices by 14 per cent, with zircon prices being raised by 12 per cent.
Zircon production guidance was also lifted for the next three years. On top of that, Iluka guided to lower capex at its flagship Jacinth-Ambrosia mine, and deferred the Balranald project.
The Yarra Emerging Leaders Fund said it continues to hold an overweight position in Iluka Resources, which the fund says remains a relative safe haven in Metals & Mining given its visibility over commodity pricing for the foreseeable future.