Kenmare set to motor in 2012

25th Aug 2011 07:37

Irish mining firm Kenmare Resources is going flat out to take advantage of a 'very positive product market environment', the group's managing director, Michael Carvill, said.Carvill said the group is working hard to increase current levels of production, as market prices for titanium feedstocks and zircon continue to improve. Average prices for ilmenite increased by 30% year-on-year and for zircon by 38% in the first half of the year.Those rising prices helped the company post a sharp increase in first half revenues from $40.6m to $56.0m, despite around $20m of revenue expected in the first half being delayed to the second half as a result of shipping delays caused by miserable weather in June."However, it remains the case that it will be the start of 2012 before we really benefit from the very substantial improvements that have occurred in ilmenite prices when existing lower priced contracts expire. In future, we expect that ilmenite prices will be fixed over much shorter periods," the company said.Earnings before interest, tax, depreciation and amortisation soared to $19.7m from $4.4m last year, but finance costs of $15.65m, up from $15.40m last year, and foreign exchange losses of $9.79m, versus last year's gain of $22.13m, saw the company post a pre-tax loss of $14.17m, compared to last year's profit of $1.15m.Bank loans at the end of June stood at $346.2m, up from $331.0m a year earlier. The average interest rate on loans at the period end was 9%.Cash and cash equivalents at 30 June amounted to $178.4m, down from $238.5m a year earlier, with the reduction largely reflecting the investment in the expansion of production facilities during the period.Ilmenite production of 323,700 tonnes was marginally higher than the 319,800 tonnes produced in the first half of last year, while the increase in zircon production was more marked, at least in percentage terms, up from 16,800 tonnes last year to 19,800 tonnes.The company said it is still looking for a new chairman. "We are in discussions with some very promising candidates and are hopeful of achieving a near-term resolution to this search," the group said.The share price of the FTSE 250 company was up 1.94p at 43.94p in early trading on the morning of the results. --jh