Kenmare Resources’ (KMR) maiden dividend may have been overshadowed by operational issues in the first half, reflected in an 11 per cent fall in cash profit through the period. The titanium feedstock producer revealed a record half for mined ore volumes, but the financial performance was constrained by lower grades and tricky weather, the latter of which made shipping difficult from the Moma mine in Mozambique, a site that produces ilmenite, rutile and zircon. The upshot was that total shipments of finished products decreased by 18 per cent to 483,500 tonnes. However, managing director Michael Carvill said that tonnage would be made up in the second half, and guidance would be maintained.
Alongside the shareholder return milestone, there’s plenty going on for Kenmare operationally. In June, the board signed off the $106m (£87m) move of the just-upgraded wet concentrator plant B (WCP B) to a new site on the licence, Pilivili. This will involve shifting the massive plant and dredge down a specially-made 23km road and estuary crossing, hence the big cost. WCP B will be out of action for two months during the move next year. There’s also a smaller new plant being commissioned by the end of 2019.
Consensus forecasts compiled by Bloomberg have full-year cash profit and earnings per share at $101m and 51¢, respectively, climbing to $108m and 55¢ in 2019.
| KENMARE RESOURCES (KMR) | ||||
| ORD PRICE: | 243p | MARKET VALUE: | £266m | |
| TOUCH: | 240-243p | 12-MONTH HIGH: | 264p | 174p |
| DIVIDEND YIELD: | 0.9% | PE RATIO: | 7 | |
| NET ASSET VALUE: | 795¢ | NET CASH: | $3.5m | |
| Half-year to 30 June | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
| 2018 | 140 | 28.8 | 24.0 | nil |
| 2019 | 123 | 22.8 | 20.0 | 2.66 |
| % change | -12 | -21 | -17 | - |
| Ex-div: | 26 Sep | |||
| Payment: | 25 Oct | |||
| £1=$1.22 | ||||
