Kenmare Resources, an Irish mining company, has achieved record revenues despite facing production challenges caused by lightning strikes at its site in Mozambique earlier this year. The company operates the Moma Titanium Minerals Mine, located in northern Mozambique, and is recognized as one of the world’s largest producers of titanium minerals and zircon. Kenmare Resources supplies its titanium feedstocks to customers in 15 countries, accounting for approximately 7% of the global titanium feedstocks market.
In its half-year financial results, Kenmare Resources reported a revenue of $242.9 million (€222.4 million), representing a 23% increase from $197.3 million in the previous year. The majority of this revenue growth was attributed to an increase in mineral product sales, generating $229.7 million (€210 million) during the same period, a 26% rise from the previous year. The company attributed this growth to a 31% increase in shipment volumes, supported by a drawdown of finished product stockpiles. However, revenue from the company’s freight operations declined from $15.2 million to $13.2 million.
Michael Carvill, the managing director of Kenmare Resources, acknowledged that production during the first half of 2023 was lower than expected due to a severe lightning strike in the first quarter and its subsequent impact. The company’s heavy mineral concentrate (HMC) production for the first six months of the year reached 633,900 tonnes, representing a 14% decrease compared to the same period in the previous year. Additionally, interruptions from the grid and unplanned maintenance by Electricidade de Moçambique resulted in poor power quality, leading to reduced mining operating hours.
Despite these challenges, record revenues were achieved due to favorable product pricing and strong shipment volumes between January and June. Earnings before interest, taxes, depreciation, and amortization (EBITDA) increased by 6% to $110 million compared to the previous year, with profit after tax rising to $67.8 million (€62 million), an increase from $62.5 million in the previous year.
However, Kenmare Resources also experienced an increase in operating costs, reaching $230 per tonne of finished product, a 24% increase from $185 per tonne in the first six months of 2022. The total operating costs for the period between January and June amounted to $162.6 million, a 32% increase from $123.3 million in the previous year. As of the end of June, the company’s net cash increased to $42.3 million, up from $25.7 million at the end of December 2022.
Kenmare Resources anticipates higher HMC production in the second half of the year. Despite slightly muted market demand, the company expects strong financial performance in the second half, with cash flows supporting all expected expenditures and shareholder returns. Kenmare Resources has also announced a share buyback of $30 million.