Kenmare reports record jump in revenue on higher volumes and prices

The strong prices that sent sales soaring at titanium miner Kenmare Resources in 2021 have continued into this year, company managing director, Michael Carvill, says.

Kenmare’s revenues jumped 87 per cent to $455.9 million (€413.5m) last year on the back of record production volumes and higher average prices. Profit after tax rose almost eightfold to $128.5 million in 2021 from $16.7 million the previous year.

The Dublin- and London-listed company, which operates the Moma titanium mineral mine in Mozambique, said prices had been on average 21 per cent up on the previous year.

Speaking after Kenmare published its results, Mr Carvill confirmed that demand and prices continued growing in the opening three months of this year. “In 2021, each quarter got better,” he said. “In quarter one 2022 we’re experiencing strong demand and pricing.”

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Global stocks of the titanium ore, ilmenite, that Kenmare principally mines, remain low.

Titanium is mostly used in paints and pigments to lend whiteness or opacity to hundreds of products used every day. Along with ilmenite, Kenmare also produces zircon, rutile and concentrates.

Mr Carvill acknowledged that the war in the Ukraine and post-Covid supply squeezes posed some risks to the business. Anything likely to hit global growth could ultimately affect demand for Kenmare's products, he said.

In January the company estimated it would produce between 1.125 million and 1.225 million tonnes of ilmenite in 2022.

Mr Carvill said a tropical storm slowed production in the first quarter. “Production is a little bit down. We’re maintaining our guidance but there is some catching up that we have to do for the rest of the year.”

Kenmare recommended a 2021 dividend of $32.1 million or 32.71 cent per share, up 227 per cent on 2020.

Concentrate

The company announced a record annual heavy mineral concentrate production of 1.5 million tonnes, 30 per cent more than in 2020. Ilmenite production increased by 48 per cent to 1.1 million tonnes, benefiting from increased heavy mineral concentrate processed.

The company said it had a net debt position of $82.8 million in 2021 compared to $64 million in 2020.

In a statement, Mr Carvill said: “2021 was a record year for Kenmare on all fronts. Our financial results were driven by record production volumes and higher average prices received for our products, with revenues up 87 per cent and Ebitda up 182 per cent.”

“Following our lowest ever lost-time injury frequency rate in 2021, we have continued to achieve new safety milestones, passing eight million hours without a lost-time injury in early March 2022,” he said.

“Production in Q1 2022 has been impacted by poor weather conditions but we remain on track to achieve our 2022 guidance,” he added.