Kenmare sees H1 revenue decrease

JOHANNESBURG (miningweekly.com) – LSE-listed Kenmare Resources’ half-year revenue fell 24% to $56.2-million for the six months ended June 30.

In a statement released on Wednesday, the company attributed its revenue decrease to lower average heavy minerals prices, owing to pricing and subsequent contracts occurring at the bottom of the cycle in late 2015, as well as a reduced value sales mix during the period.

Earnings before interest, taxes, depreciation and amortisation of negative $10.7-million remained stable in the period, year-on-year, despite commodity prices reaching their lowest point in the first half of the year.

Kenmare’s ilmenite production in the period under review increased by 24% to 402 900 t, while zircon production was 20% higher at 28 500 t.

The group also achieved a new half-year shipment record, with total shipments of finished products in the first six months increasing by 7% to 441 700 t.

The company reduced its operating loss to $24.9-million, down from $27.2-million in the corresponding period last year.

Moreover, the group last month completed a capital restructuring to reduce debt to $100-million from $392-million and to provide an additional $75-million of cash for working capital.

CEO Michael Carvill noted that the company had made significant progress in reducing unit operating costs by 22% during the half-year period through cost savings and increased production.

“Further reductions are expected in the second half of the year as higher production is generated from increased grade levels, volumes of ore mined, recoveries and operating time,” he concluded.