Miner Kenmare Resources (KMR) digs up specialist minerals sands used in paints and coatings, but a combination of lower prices, fewer shipments and higher costs hammered half-year revenue and cash profits plunged two-thirds to $18.8m (£12.2m). However, there are signs of improvement, and a 50 per cent capacity expansion at the Moma complex in Mozambique is up and running. Reassuringly, there's nothing obvious that could derail the ramp up there, or prevent the facility operating at full capacity.
Progress so far has been encouraging. Expansion at Moma meant production of ilmenite hit 80,000 tonnes in July compared with a 9 per cent increase during the entire first half to 302,600 tonnes. It should increase further towards design capacity in the coming months. Zircon output is ramping up again, too, after disruption from new facilities caused a 19 per cent slump over the six months to 19,100 tonnes. But prices remain a problem. A major destocking cycle by the pigment industry has lasted much longer than expected and the market remains "subdued". Indeed, a nascent recovery in US housebuilding is being offset by a "sluggish" Europe and "challenging" China. Yet, in those two centres of ceramics production, demand for zircon is recovering, albeit slowly, and Kenmare expects prices to at least remain stable.
KENMARE RESOURCES (KMR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 27.6p | MARKET VALUE: | £698m | |
| TOUCH: | 27.5-27.8p | 12-MONTH HIGH: | 44.6p | Low: 23.3p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 23.6¢ | NET DEBT: | 55% | |
| Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2012 | 109 | 38.8 | 1.61 | nil |
| 2013 | 79 | -9.2 | -0.40 | nil |
| % change | -27 | - | - | - |
£1=$1.55 | ||||
