Kenmare Resources cuts losses as market improves

Irish miner company Kenmare Resources is expected to show further bottom line improvements this year after reporting a significant narrowing in losses and an increase in productivity in 2016. 

The Dublin-based company which owns and operates the Moma titanium mine in Mozambique yesterday reported record annual production of ilmenite, rutile and zircon and record shipments of finished products of 1.02 million tonnes, up 28% on 2015 levels.

Kenmare’s revenues dipped marginally – from $142.5m (€132m) to $141.5m – but it slashed its pre-tax losses from $61.9m to $17.1m and returned to profitability, on an earnings before interest, tax, depreciation and amortisation basis, with earnings of $5.2m, compared to a negative $11.5m in 2015.

Net debt was slashed by 88%, last year, to $44.8m; following a major restructuring and fundraising round which cut $200m from the company’s debt mountain.

The second half of last year saw an improvement in prices paid for mined product and Kenmare is hopeful of that trend continuing. It also expects its own production increases to continue.

“I remain optimistic that the positive industry supply/demand dynamics, combined with the operational improvements and stability achieved during 2016, places Kenmare in an excellent position to deliver meaningful long-term returns to shareholders,” said managing director Michael Carvill.

“Sustained cost discipline, combined with an improved market, implies that 2017 should be a very good year for the group and its shareholders,” said Caren Crowley resources analyst at Davy Stockbrokers.