Kenmare Resources (KMR) H2 2024 earnings summary

Executive summary

• Received and rejected a non-binding cash offer at GBP 530/share; consortium has until April 17 to make a formal offer, with due diligence ongoing.

• Operates the Moma Titanium Minerals Mine in Mozambique, supplying 6% of global titanium feedstocks and maintaining a low-cost, long-life production profile with over 100 years of resources at current rates.

• Major capital investment underway, notably the WCPA plant upgrade and transition to the Nataka ore body, with $102m spent in 2024 and the project on schedule and within budget.

• Strong safety performance in 2024, achieving the lowest ever all-injury frequency rate and over four million hours without a lost-time injury.

• Focus on sustainability, community engagement, and environmental initiatives, including a 12% reduction in carbon emissions since 2021.

Financial highlights

• Mineral product revenue declined 10% year-over-year to $392.1m due to a 14% drop in average prices, partially offset by a 4% increase in sales volumes and product mix.

• EBITDA fell 29% to $157.1m (margin 40%, down from 50% in 2023), and profit after tax dropped 50% to $64.9m.

• Cash operating costs rose 7% year-over-year to $243.6m, driven by higher labor and power costs, including non-recurring items.

• Net debt at year-end was $25.0m, compared to net cash of $20.7m at the end of 2023, reflecting $154m in capital investment and $48m in shareholder distributions.

• Full year 2024 dividend of $0.32/share (total $28.6m), representing a 40% payout ratio of adjusted profit after tax.

Outlook and guidance

• 2025 ilmenite production is expected to be in line with 2024 (guidance: 930,000–1,050,000 tonnes), with total cash operating costs anticipated at $228–252m.

• Shipments are forecast to exceed production in 2025, drawing down finished product stockpiles.

• Capital expenditure for 2025 is projected at ~$155m for development projects, mainly the WCP A upgrade, with $16m for improvement projects and $29m for sustaining capital.

• Titanium feedstock market expected to remain steady in 2025, with strong demand and good order book visibility.

• Ongoing focus on capital investment, especially WCPA project, and maintaining dividend payments.