Kenmare Resources: ‘further growth in revenues, earnings and cashflows’ likely in 2022 says Davy analyst (LON:KMR)

Kenmare Resources

Kenmare Resources plc (LON:KMR) announced its preliminary results for the twelve months to 31st December 2021. DirectorsTalk caught up with Davy Research Analyst Colin Grant to discuss its latest results.

Q1: What are the highlights from the FY2021 results?

A1: Very strong production volumes following the relocation of WCP B to Pilivili. Prices have moved sharply higher, especially in H2, and this has helped drive record revenues, EBITDA, margins and free cashflow. Net debt of $83m remains low following the completion of the 13.5% share buyback in December and the ongoing payment of dividends. 

Q2: How do you see the outlook for the company?

A2: The outlook is far more positive than is implied by the share price. The supply response to high prices has been much more muted this cycle than previously and this supports the outlook for pricing. The company is likely going to see further growth in 2022 in revenues, earnings and cashflows moving the company into a net cash position. 

Q3: Have you forecasts changed in any way?

A3: We have not changed our forecasts as we put through a very large upgrade only two months ago. However, pricing trends remain favourable and we see upside risk to our forecasts. The company will be reporting Q1 production in a few weeks so that will be the next datapoint and we may reconsider our forecasts at that stage. 

Kenmare Resources plc (LON:KMR) is an established mining company, which operates the Moma Titanium Minerals Mine, located on the north east coast of Mozambique. 

Kenmare is a leading Titanium minerals producer who’s raw materials are strongly linked with global growth and urbanisation. Kenmare is a standout example of a mine that operates to the highest standards of governance, social and environmental policy and performance. This low-cost, bulk mining operation predominantly utilises hydro-generated power (c. 90%)  and progressive rehabilitation processes, and aims to be a catalyst for positive change in its host communities. Kenmare aligns with a number of voluntary programmes including the EITI, TCFD and IFC.

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