Kenmare Resources (KMR) H2 2023 earnings summary

Executive summary

• Revenue fell to $458.5m from $526.0m and EBITDA to $220.3m from $298.0m amid weaker pricing and lower production; net cash remained positive at $20.7m.

• 2024 ilmenite production guidance is 950,000–1,050,000 tonnes, with production expected to be H2-weighted; Nataka investment is progressing to secure long-term production.

Financial highlights

• 2023 revenue was $458.5m, operating profit $155.1m, profit before tax $149.9m and profit after tax $131.0m; 2022 respective figures were $526.0m, $233.4m, $222.1m and $206.0m.

• EBITDA was $220.3m versus $298.0m in 2022, the second-highest result in the operating history; average received price was $418/t, down 10% YoY.

• Cash operating costs rose 4% to $228.1m; finished product production fell 9%, lifting cash operating cost per tonne 15% to $209.

• Cash flow was $196m versus $290m in 2022; year-end cash was $71m and net cash was $20.7m.

Outlook and guidance

• 2024 ilmenite production guidance is 950,000–1,050,000 tonnes; total cash operating costs are forecast at $219m–$243m, or $198–$218/t of finished product.

• 2024 production is expected to be broadly in line with 2023 and H2-weighted; 2025 production is expected to be similar to 2024.

• Development projects and studies are forecast at ~$189m in 2024, primarily for WCP A’s Nataka transition and WCP B feasibility studies; sustaining capital is $29m and improvement projects $6m.

• WCP A capex is estimated at up to $341m, including $225m for two dredges, the desliming circuit and tailings storage facility; infrastructure DFS completion is expected in Q2 2024.

• WCP B upgrade DFS is expected in Q2 2024; execution is deferred until 15 months after FID to manage capital spending and preserve financial flexibility.