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Kenmare posts 30% profit growth in H1 2022 on strong mineral sands market, increases dividend

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(Kitco News) - Kenmare Resources (LSE: KMR), one of the leading global producers of titanium minerals and zircon, today reported EBITDA of $105.5 million in H1 2022, a 28% increase compared to H1 2021 ($82.3 million), and profit after tax of $62.5 million, a 30% increase (H1 2021: $48.0 million).

The company's revenue on a free on board ("FOB") basis was $182.1 million in H1 2022, a 9% increase compared to H1 2021 ($167.8 million), due to a higher average price received for Kenmare's finished products more than offsetting lower shipment volumes.

Kenmare also reported record average price received on an FOB equivalent basis for all finished products of $429 per tonne in H1 2022, a 52% increase compared to H1 2021 ($282 per tonne), benefitting from strong market conditions for all products.

The company noted that strong market conditions for all of Kenmare's products continued in H1 2022 and demand is remaining robust in Q3, supported by low global inventories.

The company also announced interim dividend of USc10.98 per share, a 51% increase on H1 2021 (USc7.29), in line with Kenmare's target dividend payout ratio of 25% of profit after tax for 2022.

Kenmare added its Heavy Mineral Concentrate ("HMC") production was 738,300 tonnes in H1 2022, an 8% decrease compared to H1 2021 (798,500 tonnes), due primarily to higher slimes levels, with a 7% reduction in ore grades and a 2% reduction in excavated ore tonnes.

Total shipments were 424,300 tonnes, a 29% decrease compared to H1 2021 (594,100 tonnes), due primarily to poorer weather conditions and reduced shipping capacity as a result of the Bronagh J transshipment vessel undergoing its planned five-yearly dry dock maintenance work.

"After a challenging first five months of the year, production improved in late May and this has continued for the 12 weeks since then. At this run rate, we remain on track to achieve guidance, albeit at the bottom of the range," the company said in a statement. "We expect that our financial position will continue to strengthen in H2 2022, as shipments are anticipated to increase and our order book is largely committed."

Kenmare Resources is one of the world's largest producers of mineral sands products. Kenmare operates the Moma Titanium Minerals Mine in Mozambique. Moma's production accounts for approximately 8% of global titanium feedstocks and the Group supplies to customers in more than 15 countries.

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