LONDON (ShareCast) - (Sharecast News) - Titanium minerals and zircon producer Kenmare Resources declared a maiden dividend of 2.66 US cents (2.2p) per share as part of its interim results on Tuesday.
The London-listed firm reported a 7% year-on-year increase in average received free on board prices for the period ended 30 June, to $239 per tonne, which it said reflected stronger market conditions.

Total cash operating costs were $152 per tonne, which was in line with the first half of 2018 and within the 2019 guidance range of between $150 and $160 per tonne.

Revenues fell 12% to $122.7m, which was blamed on an 18% reduction in finished product shipments, partially offset by 7% higher average free on board prices.

Kenmare's board aid revenues were expected to strengthen in the second half, as shipping volumes increased.

EBITDA was down 11% at $42.8m, with profit before tax falling 20% to $22.8m, which was also put down to the lower shipping volumes.

Net profit after tax shrank by 17% to $21.9m.

At the end of the first half, Kenmare said it had a net cash position of $3.5mm down from $13.5m at the end of December.

The board said market conditions for ilmenite strengthened in the first half, with markets expected to remain tight, which would support higher prices in the second half.

It added that the xircon market remained stable in the period, but was expected to be subdued in the latter part of the year, while long-term fundamentals remained "strong" due to supply constraints.

"I'm proud to declare our maiden dividend of 2.66 cents per share, following the announcement of our dividend policy in 2018," said Kenmare Resources managing director Michael Carvill.

"Now is the appropriate time to begin making shareholder returns due to our balance sheet strength, improving free cash flow profile and long-life resources.

"Operationally, we continue to deliver robust results."

Carvill said excavated ore volumes in the first half set a new record, with the company "on track" to achieve its full-year guidance on all stated metrics.

He said the firm also expected "strong" shipping volumes in the second half of the year, which, combined with positive pricing dynamics, were expected to boost revenues and profitability.

"We have already seen ilmenite price increases in Q3 2019 and markets are expected to remain tight, with positive long-term fundamentals.

"Our development programme is progressing on schedule, with the objective of increasing production to 1.2 million tonnes per annum of ilmenite from 2021 at reduced cash operating costs per tonne.

"We look forward to providing shareholders with a compelling combination of growth and returns."

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