London-listed titanium minerals and zircon producer Kenmare Resources MD Michael Carvill says the company’s preliminary results for the 12 months to December 31, 2022, were driven by steady production volumes and record product prices, which saw the company’s mineral product revenues increase by 18% and its earnings before interest, taxes, depreciation and amortisation (Ebitda) by 39% to $298-million.  

He said “2022 was a record year of financial performance for Kenmare,” which operatedthe Moma titanium minerals mine, in northern Mozambique. 

“We are tracking within guidance for 2023, despite suffering an extremely severe lightning strike which halted production for an extended period in February, albeit towards the bottom end of our range for ilmenite and rutile,” Carvill said on March 22. 

For the remainder of this year, he said the market remained buoyant for Kenmare’s products, although at marginally lower levels than the highs of the third quarter of last year, with strong customer demand for volume. 

Kenmare announced that it had moved to a net cash position of $27.5-million at the end of 2022, which represented a $110.3-million improvement, compared with 2021. 

Carvill highlighted the comparison of the company’s current net cash position to the $82.8-million net debt in 2021, as well as the cash and cash equivalents position of $108.3-million, compared with $69.1-million in 2021. 

Carvill said the board had recommended a dividend of $51.5-million, or about $0.54 a share, which is a 66% increase from the previous year. This dividend comprises an interim dividend of about $0.11 a share, paid in October 2022, and a final dividend of about $0.43 a share, which will be payable in May. 

Kenmare reported an 18% increase in mineral product revenue, reaching $498.4-million in 2022, compared with $420.5-million in 2021. This was owing to a 42% increase in the average price received for Kenmare's products. However, there was a 13% increase in total cash operating costs to $216.7-million, as a result of higher fuel and labour costs, as well as increased electricity consumption. 

Further, there was a 16% increase to $180/t in cash operating costs, which was a consequence of higher total cash operating costs and a 2% decrease in finished product production. However, cash operating costs decreased by 36% to $60/t of ilmenite, owing to higher co-product revenues. 

Kenmare's $298-million Ebitda was a 39% increase over $214.2-million in 2021, attributed to stronger product pricing, representing a 60% Ebitda margin, compared with 51% in 2021.  

The company's profit after tax also increased by 60% to $206-million in 2022, compared with $128.5-million in 2021, as a result of higher product prices.  

Additionally, diluted earnings a share increased by 83% to $2.12, from $1.16 a year before.