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Kenmare Resources plc (LSE:KMR, ISE:KMR), one of the leading global producers of titanium minerals and zircon, which operates the Moma Titanium Minerals Mine in northern Mozambique, today announced its results for the six month period ended 30 June 2016 (“H1 2016”) with special attention to its record 7% increase in shipments of finished products.
• Ilmenite production in H1 2016 increased 24% to 402,900 tonnes compared to H1 2015, zircon production in H1 increased 20% to 28,500 tonnes
• Total shipments of finished products in H1 2016 increased 7% to 441,700 tonnes, a new half yearly record
• Revenues of US$56.2 million (H1 2015: US$73.9 million), as a result of lower average prices due to pricing and subsequent contracts being at the bottom of the cycle in late 2015, and a reduced value sales mix during the period
• The ilmenite market has shown signs of recovery in recent months with prices increasing
• Cash operating costs per tonne of finished product declined 22% in H1 2016 to US$153 per tonne (H1 2015: US$197 per tonne), a result of continued cost savings and increased production
• EBITDA of negative US$10.7 million remains stable year on year (H1 2015: negative US$10.6 million), despite commodity prices reaching lowest point in H1
• Operating loss reduced to US$24.9 million (H1 2015: US$27.2 million)
On 28 July 2016, the Group completed a capital restructuring to reduce debt to US$100 million (from US$392.4 million using agreed exchange rates) and to provide an additional US$75 million of cash for working capital and to meet fees and expenses of the capital restructuring.
Michael Carvill, Managing Director, said: “The Company has made significant progress in reducing unit operating costs by 22% during the period, through cost savings and increased production. Further reductions are expected in the second half of the year as higher production is generated from increased grade levels, volumes of ore mined, recoveries and operating time. Prices received for our products in H1 2016 are a reflection of the weak market conditions experienced at the end of 2015, when prices for the majority of H1 2016 shipments were struck.
I am pleased with the recent improvement in ilmenite prices from their low point, following four years of decline, and expect higher prices to flow through our revenues in H2 2016 and thereafter. The conclusion of the capital restructuring has provided the Company with a robust balance sheet, reduced interest payments and enhanced liquidity and will position the business to take advantage of what we believe will be a sustained recovery in the market.”