Kenmare Resources records jump in profits and revenues

Kenmare Resources reported a sharp increase in revenues and profits last year, as the Irish producer of titanium minerals and zircon benefited from a greater volume of shipments and higher average prices.

In the 12 months to December 31st, Kenmare reported a 26 per cent increase in revenues to $262.2 million (€232 million), up from $208.3 million a year earlier, primarily due to increased volumes shipped and higher average received prices. The Dublin- and London-listed firm, which operates the Moma Titanium Minerals Mine in northern Mozambique, saw earnings (ebitda) increase by 54 per cent to $93.3 million

Kenmare had a net cash position of $13.5 million achieved at the end of 2018, a turnaround from a $34.1 million net debt at the end of 2017. Pre-tax profits rose by 205 per cent, from $18.4 million in 2017 to $56.1 million last year.

Managing director Michael Carvill said 2018 was Kenmare's third consecutive year of achieving its production guidance and delivering record shipment volumes.

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“We recorded a 54 per cent increase in ebitda to $93.3 million (up $32.8 million) and a year-end net cash position of $13.5 million, compared to $34.1 million of net debt at the end of 2017 (up $47.6 million).

Safety improvements

“Importantly, we also achieved a significant improvement in our safety performance, with a lost-time injury-frequency rate of 0.12 per 200,000 man hours worked in 2018, the lowest level to date,” Mr Carvill said, adding that the company also made “good progress” towards its objective of delivering an approximate 20 per cent increase in its production rate of ilmenite to 1.2 million tonnes per annum by 2021.

“Average received prices for our products were higher in 2018 compared to 2017 and we see a positive outlook due to continued demand growth, depletion of existing mines and limited supply from new mines in the coming years,” Mr Carvill said.

Kenmare said it was working towards paying “modest dividends from 2019”, with plans to increase capital returns materially from 2021 after its current development projects have been delivered.

Looking ahead, Kenmare said it would look to “enhance financial flexibility while we deliver our outlined projects, in addition to providing stability and protection against inevitable economic and commodity cycles”.