Kenmare revenue declines 24% on falling commodity prices

Mining company Kenmare Resources saw half-year revenue fall 24 per cent to $56.2 million (€50 million) on the back of lower commodity prices.

The firm, which has a substantial titanium minerals mine in Mozambique, however, said total shipments of finished products increased by 7 per cent to 441,700 in the six months to the end of June – a new half-year record.

Cash operating costs per tonne of finished product declined 22 per cent to $153 per tonne, down from $197 last year, a result of continued cost savings and increased production.

Stable pretax losses

As a result, pretax losses remained stable at $10.7 million despite commodity prices reaching lowest point during the period.

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

Last month, the group 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.

Managing director Michael Carvill said the company made significant progress in reducing unit operating costs by 22 per cent during the 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 said.

“Prices received for our products in H1 2016 are a reflection of the weak market conditions experienced at the end of 2015, when prices for the majority of H1 2016 shipments were struck,” Mr Carvill said.

“The conclusion of the capital restructuring has provided the company with a robust balance sheet, reduced interest payments and enhanced liquidity and will position the business to take advantage of what we believe will be a sustained recovery in the market,” he added.