London-listed Kenmare Resources has reported that weak market conditions for its products, combined with the slower-than-expected commissioning of wet concentrator plant (WCP) A, continued to impact Kenmare’s financial performance in the six months ended June 30.

However, Kenmare MD Tom Hickey explains that, with a strengthening zircon market and the capital expenditure (capex) for the WCP A upgrade project now substantially complete, the outlook is slightly improved.

As Kenmare progresses further into the third quarter, Hickey says that the company remains on track to achieve its 2026 shipments guidance, which is its key metric for the year.

The company expects to achieve its yearly operating and capital cost guidance, although softer-than-expected ilmenite production in the first half of the year led Kenmare to moderate its 2026 guidance to about 800 000 t, instead of more than 800 000 t previously.

Pleasingly, Hickey notes, production has improved in July and early August, owing to a strong performance by WCP B and steady progress at WCP A.

“Although the average price received for our products declined in the first half, demand for Kenmare’s products remains stable, with a healthy order book for the third quarter.”

Hickey says the company continued to engage constructively with the government of Mozambique regarding the Moma mine‘s implementation agreement during the first half, with significant progress made over recent weeks on key issues.

OPERATIONS

Kenmare reports that heavy mineral concentrate (HMC) production in the six months under review was 442 200 t, down 34% year-on-year, owing primarily to a 26% decrease in ore grades, as expected since WCP A is approaching the end of its Namalope mine path.

Total production of finished products was 430 100 t during the period, down 14% year-on-year, primarily owing to lower HMC processed.

Total shipments of 555 600 t in the reporting period (including zirconium titanium) were up 14% year-on-year, owing to the drawdown of finished product stockpiles and consistent transshipment performance.

As mentioned, commissioning of the WCP A upgrade project continued to be slower than expected, primarily owing to the extended commissioning process for the two new dredges – Kenmare says it has continued to implement solutions, with steady progress achieved in July and early August.

FINANCIALS

Kenmare reiterates that weak market conditions for its products, combined with the ongoing ramp-up of the WCP A project, continued to impact the company’s financial performance in the first half of 2026.

Cashflow generation and liquidity were supported by strong shipping performance and the unwinding of finished product inventory. With a strengthening zircon market and the capex for the WCP A project now substantially complete, the company says the outlook is slightly improved.

Kenmare generated mineral product revenue of $134.5-million in the first half of the year, down 16% year-on-year, primarily owing to a lower average price received as a result of weak product markets.

Kenmare reports earnings before interest, taxes, depreciation and amortisation (Ebitda) of $4.4-million for the six months ended June 30, compared to an adjusted Ebitda of $47.2-million excluding the $100.3-million impairment charge in the same months last year.

The company also reports a loss after tax of $34.1-million, compared to an adjusted profit after tax of $6.1-million in the first half of 2025, owing primarily to lower product pricing.

The company’s cash operating cost for the first half of this year was $255/t of finished product, up 3% year-on-year, owing to a 14% decrease in production of finished products, largely offset by a 12% decrease in total cash operating costs.

Additionally, the company’s cash operating cost per tonne of ilmenite (net of co-products) was $226, up 7% year-on-year, owing primarily to a 39% decrease in ilmenite production.

Kenmare’s revolving credit facility (RCF) upsized by $30-million to $230-million, which, along with adjustments to financial covenants, provides important additional financial flexibility.

At the end of the reporting period, net debt was $175.8-million, with strong receipts recorded post period-end.

The company explains that market conditions continued to be challenging in the first half, although the zircon market strengthened – Kenmare says it has a healthy order book for the third quarter and a high proportion of contracted shipments, giving good sales visibility.

OUTLOOK

Kenmare says it is on track to achieve its 2026 shipments guidance of at least 1.1-million tonnes, which represents a 15% uplift compared to 2025 shipments.

The company also expects to achieve its 2026 total cash operating cost guidance, which at a range of $215-million to $225-million is 7% to 12% lower than its 2025 cash operating cost of $243-million.

Financial performance in the second half of this year is also expected to benefit from zircon prices continuing to strengthen and a higher-value ilmenite product mix in the third quarter.

Capex in the second half of the year is expected to be the same as in the first half at $30-million, although just $7-million is anticipated to relate to the WCP A upgrade project, as investment continues to reduce and WCP A ramps up further.

Kenmare says the $30-million upsize of Kenmare’s RCF and associated covenant amendments, together with its healthy net current assets, provides financial flexibility and liquidity during the current market weakness and project ramp-up phase.

The company notes that management’s focus remains firmly on capital efficiency, ensuring funds are deployed where needed to support safe production and taking any opportunities to reduce expenditure where possible.