Kenmare Resources plc

Hard numbers reported: revenue was down 16% versus H1 last year; average price received was $242 per tonne; shipments were 555,000 tonnes, up 13%; EBITDA was $4 million; and loss after tax was $34 million. Net debt rose to $176 million from about $159 million at year-end. Cash operating costs fell by around $15 million, or 12%, to just under $110 million; total cash operating cost guidance remains $215 million to $225 million for the full year. Ilmenite pricing fell to $203 per tonne from $286 per tonne, zircon pricing fell to about $1,100 per tonne from around $1,300 per tonne, and ZrTi sales exceeded 80,000 tonnes in H1. Management reaffirmed 2026 shipment guidance of 1.1 million tonnes and said ilmenite production is expected to be approximately 800,000 tonnes for the full year. They also guided to about $7 million of development CapEx in H2, versus $23 million in H1, and noted the RCF was upsized by $30 million to $230 million total.

Tom Hickey struck a cautiously constructive tone, emphasizing that Kenmare is focused on controlling what it can through a weak market and a slower-than-planned WCP A ramp-up. He highlighted strong safety performance, cost discipline, and progress on the Mozambique implementation agreement, saying the language around those talks is now warmer and that both sides appear committed to reaching a conclusion. He also stressed the long life of the Moma asset, the importance of Nataka, and the company’s readiness to benefit when markets recover.

James McCullough said H1 performance reflected lower prices and product-mix pressure, with average realized price at $242 per tonne, EBITDA at $4 million, and net debt at $176 million. He pointed to a 12% reduction in cash operating costs to just under $110 million, driven by about $5 million less labor cost, about $5 million less production overheads, and about $1.5 million less power/fuel/chemicals. He also noted the company accrued $2.2 million in H1 under the proposed implementation agreement terms, bringing the cumulative accrual to $7.9 million since December 2024, and said the $30 million RCF increase was precautionary rather than because a draw was needed.

Analysts focused on 2027 ilmenite production, the pace of oversupply relief, further cost savings, H2 price realization, WCP A bottlenecks, the implementation agreement timeline, funding sufficiency, and dividends. Management said 2027 output will depend partly on the Nataka transition and that SMO capacity is being expanded to offset grade declines; they estimated the new winch brakes could lift utilization by about 10% to 15%, but said pumping-system issues also remain important. On dividends, Tom Hickey said the reasons for pausing the dividend have not changed and that regular payouts would require both market improvement and a stronger balance sheet, while on the IA he declined to give a firm timetable, citing the Council of Ministers approval process and prior false starts.