Kenmare rides market rebound despite 2023 profit slide

Kenmare Resources (LSE: KMR) defied a drop in 2023 profits with a share price rise, buoyed by stronger-than-expected markets and production on track for 2024 targets.

The Mozambique-based titanium miner reported a one-third decline in pre-tax profits to $149.9 million for 2023, alongside a 13% fall in revenue. However, the company pointed to a challenging operational environment and a weaker product market in the past year.

Despite these headwinds, Kenmare's share price gained 1% on Wednesday morning. The company attributed this positive performance to a market rebound in 2024, driven by rising demand for titanium pigment.

While 2023 saw a 10% dip in the average price received for Kenmare's products, the company expects this trend to reverse as pigment producers rebuild inventories. Kenmare also highlighted its strong first-quartile margin position, allowing for positive cash flow throughout commodity price cycles.

Looking ahead, Kenmare remains confident in achieving its 2024 production targets, with ilmenite output expected to range between 950,000 and 1,050,000 tonnes. The company anticipates production to be weighted towards the second half of the year, with a significant increase in output compared to the first quarter.

Although profits dipped in 2023, Kenmare's positive outlook on the market and commitment to 2024 production goals suggest the company is well-positioned for future growth.

Kenmare Resources shares are down 24% year to date.

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