Kenmare Resources said earnings slumped 29 per cent last year amid a slide in prices for titanium minerals and zircon. It comes as the mining company’s former managing director weighs putting in an improved bid with its Abu Dhabi-based backer.
The Dublin-based company’s earnings before interest, tax, depreciation and amortisation (Ebitda) fell to $157.1 million (€145 million), the company said on Wednesday, with the result broadly meeting market expectations.
Kenmare plans to reduce its dividend to 32 US cents per share from 56 cents paid out on its earnings for 2023. Still, the $26.6 million it proposes to spend on dividends brings total returns to shareholders, including stock buy-backs, to $295 million since 2019.
Global demand for titanium feedstocks like ilmenite, which used in the manufacture of everything from paints and plastics to ceramics and textiles, reached a record high during the year, supported by strong demand from emerging markets such as South America and Asia, excluding China. However, prices have fallen over the past two years, as a result of a spike in production.
Ilmenite prices are beginning to stabilise, the company said.
Demand for zircon, which is widely used in the foundry industry, has been more challenging, due to weakness in the Chinese market, said Kenmare, which operates out of the Moma mine in Mozambique.
“Despite these short-term pressures, titanium’s strategic importance continues to grow. Several regions, including Europe and the United States, have designated it as a critical mineral,” Kenmare said.
“The company’s high product quality, diverse product suite and long mine life make us a preferred partner, including for new customers signed in early 2025, and ensures we are well-equipped to manage market fluctuations.”
Kenmare confirmed earlier this month that its founding managing director, Michael Carvill and an Abu Dhabi-based private equity firm, Oryx Global Partners, had made a £473 million (€566.6 million) bid – equating to £5.30 per share – for the company.
It was rejected by the board as undervaluing the business and its prospects.
Kenmare, which is now led by chief executive Tom Hickey, reiterated that it has been providing limited due diligence information to Mr Carvill and Oryx “with the aim of improving the financial terms of the consortium’s proposal”. They must announce at least a firm intention to bid by close of business on April 17th, under a put-up-or-shut-up deadline imposed by the Irish Takeover Panel.
Mr Carvill founded Kenmare in 1986 and left the business last year. While the Co Down native owned almost 0.6 per cent of the company by the time he exited in August, he disclosed last week that he also owns stock derivatives in the company, giving him a total interest of 1.04 per cent. Oryx does not hold any shares.
Kenmare’s confirmation of the bid approach on March 6th followed an Irish Times report that morning saying that Mr Carvill had been searching for a backer to mount an offer for the company.
The group also received a bid approach from British-Australian mining giant Rio Tinto last year, according to sources. However, this has not progressed.
The company is currently working on an upgrade of its main mining plant and relocating it within the Moma site, a project the is expected to cost $341 million by 2027 but will, according to the company, “secure production for decades to come”. Kenmare plans to fund the project from existing financial resources and expected cash flow, it said.
The Moma mine is estimated to have a 100-year lifespan from now based on current production rates.
Kenmare is also currently negotiating a new royalties agreement with the government in Mozambique relating to the mine.
