Australia's Iluka year profit plummets, sees higher sales in 2014

MELBOURNE, Feb 21 (Reuters) - Mineral sands miner Iluka Resources Ltd ILU.AX reported a 95 percent slump in annual profit on Friday, in line with recent guidance, hit by weak prices for zircon and titanium dioxide and writedowns on assets.

The company, which is looking to develop a mineral sands mine in Sri Lanka, said it expects sales of zircon to increase in 2014.

Net profit for 2013 sank to A$18.5 million ($16.62 million)from A$363.2 million a year earlier. Analysts on average had expected a net profit of A$51.8 million before the company flagged writedowns earlier in February, according to Thomson Reuters I/B/E/S.

It was able to book a profit purely due to a 22 percent increase to A$87.9 million in royalties it earned from BHP Billiton's BHP.AX Mining Area C, an earnings stream it is considering spinning off as it believes investors are undervaluing it within the company.

Iluka's zircon goes into making pigments for ceramics and tiles typically used in bathware and kitchens, while its other products are largely used to make pigments for paints and titanium metal for aerospace and military applications.

It has been hit by plummeting demand from chemical companies, and cut output last year to help shore up the market.

($1 = 1.1134 Australian dollars)

(Reporting by Sonali Paul)

((Sonali.Paul@thomsonreuters.com)(+61 3 9286 1419)(Reuters Messaging: sonali.paul.thomsonreuters.com@reuters.net))

Keywords: AUSTRALIA ILUKA/RESULTS