Kenmare Resources rides increased production levels into the black

Operators of the Moma Titanium Minerals Mine in northern Mozambique, Kenmare Resources posted an 82% increase in profit for the six months leading up to 30 June.

The titanium and zircon producers saw production of ilmenite, the most important ore of titanium, increase 25% on the same time last year to 504,800 tonnes as well as posting an impressive 37% year-on-year increase of zircon production, up to 37,700 tonnes in the half.

Thanks to the increased production numbers and prices, a 14% decline in unit cast operating costs to $131 a tonne and a 21% higher level of finished products being shipped in the first half, the group reported a significantly boosted total revenue of $102.4m for the period, up from the $56.2m it announced for the first half of 2016 and not far behind the $141.2m it posted for the full 12 months.

EBITDA was $29.8m, compared to negative $10.7m in the first half of 2016.

Net profits showed a major $56.5m turnaround to $9.4m in the first six months of the year after having lost $47.1m this time last year.

Michael Carvill, managing director of Kenmare, said, "Kenmare has produced a record one million tonnes of ilmenite in the twelve months to June 2017, whilst improving safety standards, and remains on target for 2017 production guidance. We have also produced record levels of zircon and are capturing more of it in higher quality products. Increased shipments, higher average received prices, and lower unit costs have resulted in."

Looking out to the rest of the year, the outfit reiterated its full-year 2017 production guidance, adding that costs were continuing to come down.

Management also forecast the markets for ilmenite and zircon would continue rising in the backhalf of the year, although there had been some recent softening in ilmenite prices in China.

As of 0815 BST, Kenmare shares had remained relatively stable, up just 1.04% to 253.75p.