Increased pricing supported Kenmare Resources revenue in the second quarter of the year as production fell, the company said.
Higher slimes recirculation affected excavated ore volumes and grades, and production is now expected to be at the lower end of its 2022 guidance, managing director Michael Carvill said.
In a trading update for the period to June 30th, the company said prices for ilmenite rose for the seventh quarter in a row and the market for its products continued to improve.
Heavy mineral concentrate production was 353,600 tonnes in the three-month period, down 19 per cent on the previous year. Higher slime levels led to a 10 per cent reduction in ore grades and an 8 per cent reduction in excavated ore tonnes. Ilmenite production was down 14 per cent to 242,900 tonnes, while primary zircon production of 13,600 tonnes was 9 per cent lower
Total shipments of finished products were 192,800 tonnes, a 23 per cent decrease attributed to reduced transshipment capacity.
The company reduced its net debt at the end of the first half of the year by $17.3 million to $65.5 million (€65.1 million). Cash and cash equivalents were $30.7 million.
The company paid its 2021 final dividend of 25.42 US cents per share, the balancing payment of a full-year dividend of 32.71 cents per share and a dividend payout ratio of 25 per cent of profit after tax. The company said it was targeting the same dividend payout ratio for 2022.
“The market for all of Kenmare’s products continued to improve, with realised ilmenite prices increasing for the seventh consecutive quarter. Although global growth expectations have reduced for H2 2022, inventories remain low throughout the value chain and demand for Kenmare’s ilmenite is anticipated to be robust,” Mr Carvill said.
“Our balance sheet continued to strengthen, with a $17.3 million reduction in net debt at the end of the first half, after paying the $24.1 million 2021 final dividend. We are targeting a dividend payout ratio of 25 per cent profit after tax for 2022.”
