Kenmare Resources PLC on Wednesday said lower shipments hurt half-year earnings, although it continues to eye a full-year payout at the upper end of its guidance range.

The Mozambique-focused producer of titanium minerals and zircon said pretax profit totalled $27.7 million for the six months ended June 30, little more than a third of $77.5 million the previous year.

Revenue dropped 32% to $165.1 million from $242.9 million, while revenue from mineral products fell 33% to $154.5 million from $229.7 million. Kenmare blamed this decline on ‘lower shipments, pricing and product mix’.

Finished products shipped decreased 14% to 477,600 tonnes from 556,800 tonnes, and the average price received per tonne fell 22% to $323 from $413.

Earnings before interest, tax, depreciation and amortisation fell 43% to $63.2 million from $110.4 million due to the lower revenue.

Despite the lower revenue and earnings, Kenmare’s net cash pile increased by 39% to $58.9 million as of June 30 from $42.3 million one year prior.

Kenmare declared an interim dividend of 15 US cents per share, down 14% from the previous year’s 17.5 cents. However, the company expects its full-year dividend to be ‘towards the upper end of the 20-40% of profit after tax payout range’.

Kenmare added that it is on track to achieve its 2024 targets ‘across all stated metrics’ including between 950,000 tonnes and 1.1 million tonnes of ilmenite production, ‘with higher forecast grades supporting production expectations’ for the second half of 2024. It also expects shipments to rise in the second half.

‘The zircon market remains relatively stable with improving demand in India and Europe,’ Kenmare added.

Chair Andrew Webb commented: ‘Kenmare is on track to achieve 2024 guidance and in H1 we delivered an Ebitda margin of over 40%. However, reduced shipments impacted our financial performance. Shipments have strengthened in early H2, supported by strong visibility of customer orders, high finished product inventories and seasonally better weather conditions. Consequently, revenue is expected to be second-half weighted.

‘With net current assets of almost $200 million at the half year, including record net cash of $58.9 million, we are well positioned to fund our capital commitments and shareholder returns.’

Webb also thanked Michael Carvill, who steps down as managing director on Wednesday after 38 years running the company, for leaving Kenmare with a ‘strong and capable team, a tier one asset, a market-leading position and a robust balance sheet’.

Shares in Kenmare Resources traded 2.9% higher at 336.50 pence late on Wednesday morning in London.

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