Kenmare remains on track to meet earnings forecast

Miner to pay shareholders maiden dividend despite slippage in shipping finished product

Kenmare Resources managing director  Michael Carvill: Production and operating costs tracking well against guidance in the third quarter.  Photograph: Bryan O’Brien

Kenmare Resources managing director Michael Carvill: Production and operating costs tracking well against guidance in the third quarter. Photograph: Bryan O’Brien

 

Kenmare Resources said it is on track to meet full-year earnings guidance despite seeing a decline in the shipment of finished product.

In its latest quarterly results, the Dublin and London-listed mining firm said shipments were lower than expected in the third quarter due to poor weather conditions affecting loading rates.

The miner, which produces about 7 per cent of global demand for titanium dioxide, has one asset on the northeast coast of Mozambique, the Moma Titanium Minerals Mine. The mine has a lifespan of about 100 years.

Kenmare said it shipped 192,900 tonnes of finished products during the three-month period, compared to 198,900 tonnes during the same period last year.

This comprised 174,000 tonnes of ilmenite, 8,500 tonnes of primary zircon, 3,800 tonnes of rutile and 6,600 tonnes of concentrates.

Ilmenite and rutile are used to produce titanium dioxide pigment. This, in turn, is used to manufacture paints, plastics, paper, cosmetics, food additives, ceramics and textiles.

“Production and operating costs continued to track well against our guidance in the third quarter and we remain in line on both metrics,” said Kenmare managing director Michael Carvill.

Davy analyst Job Langbroek said commissioning of this third mining unit is estimated to begin over the November-December period and that the project is on schedule and budget

The company will next week pay shareholders a previously announced maiden dividend based on a minimum of 20 per cent of profits after tax.

Mr Langbroek said the company had delivered “a solid third quarter with minimal surprise”.

“At the same time, the expansion project is also on track with earlier guidance and titanium markets are tight. We believe this should be well received as it indicates a continuation of the progress evident in the last few years,” he said.