We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register for real-time alerts, custom portfolio, and market movers
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Kenmare Resources Plc | LSE:KMR | London | Ordinary Share | IE00BDC5DG00 | ORD EUR0.001 (CDI) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -5.50 | -1.66% | 326.00 | 325.50 | 328.50 | 331.00 | 326.00 | 331.00 | 17,710 | 09:50:57 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
Hot Features
Premium
TIDMKMR
Kenmare Resources plc ("Kenmare" or "the Company")
14 March 2018
2017 Preliminary Results
Kenmare Resources plc (LSE:KMR, ISE:KMR), one of the leading global
producers of titanium minerals and zircon, which operates the Moma
Titanium Minerals Mine (the "Mine" or "Moma") in northern Mozambique,
today announces its preliminary results for the twelve months to 31
December 2017.
Statement from Michael Carvill, Managing Director:
"Kenmare achieved record production and shipment volumes in 2017, in
line with guidance given at the beginning of the year. EBITDA increased
to US$59.6 million, while the Company retains a strong balance sheet,
with just US$34.1 million of net debt. We are developing plans for a
series of low capital-intensity brownfield expansion projects to
increase mining capacity and fully utilise our installed plant capacity
and export facilities, while helping to meet market demand as required.
Ilmenite prices continued to rise through 2017, albeit at a slower rate
in the second half of the year as low-grade concentrates were induced
into the market and Chinese environmental inspections caused disruption.
Received prices are expected to average at higher levels in 2018,
supported by continued demand growth and a reduction of low quality
ilmenite supplied from stockpiles.
The zircon market remains tightly supplied, with strong price increases
throughout 2017 and significant further rises already in 2018. Zircon
prices remain far below the previous peaks achieved in 2012, though
tight supply conditions are expected to continue and may lead to some
thrifting and substitution."
Overview
-- Record annual production of ilmenite, rutile and zircon - achieving
production guidance for all products
-- Ilmenite production increased 11% to 998,200 tonnes (2016: 903,300
tonnes)
-- Zircon production increased 9% to 74,000 tonnes (2016: 68,200 tonnes)
-- Total shipments of finished products increased 2%, setting an annual
record of 1,040,400 tonnes shipped
-- Lost time injury frequency rate of 0.39 per 200,000 man hours worked in
2017 (2016: 0.20)
-- Revenues increased 47% to US$208.3 million (2016: US$141.5 million)
-- Cash operating costs declined 3% to US$132 per tonne of final product
(2016: US$136 per tonne)
-- EBITDA increased to US$59.6 million, up by US$55 million (2016: US$5.2
million)
-- Profit after tax was US$19.4 million, an improvement of US$34 million
(2016: loss US$15.2 million)
-- Net debt declined by US$11 million to US$34.1 million at the end of 2017
(2016: US$44.8 million)
-- Prices increased for all products during 2017
-- Favourable demand outlook for ilmenite and particularly zircon markets in
2018
Results conference call
A conference call for analysts, investors and media will be held today
at 9:00am GMT. Participant dial-in numbers are as follows:
UK: +44 (0) 2034 281 542
Ireland: +353 (0) 1 696 8154
Participant ID# 83432701#
For further information, please contact:
Kenmare Resources plc
Michael Carvill, Managing Director
Tel: +353 1 671 0411
Tony McCluskey, Financial Director
Tel: +353 1 671 0411
Jeremy Dibb, Corporate Development and Investor Relations Manager
Tel: +353 1 671 0411
Mob: + 353 87 943 0367
Murray
Joe Heron / Aimee Beale
Tel: +353 1 498 0300
Mob: +353 87 690 9735
Buchanan
Bobby Morse / Chris Judd
Tel: +44 207 466 5000
CHAIRMAN'S STATEMENT
Dear Shareholders,
I am pleased to report robust operational progress and much improved
financial results in 2017. Kenmare has returned to profitability
following product price increases and effective management focus on cost
discipline and operational reliability, which has led to productivity
gains.
Continued market improvement
Global markets for our products improved strongly in 2017, continuing
the market recovery experienced in 2016. Inventories of titanium
feedstocks and zircon, which had been high for several years, declined
below normal operating levels during 2017, supporting long awaited
product price increases. The outlook for our products remains positive,
particularly for zircon.
Maintaining cost discipline
Kenmare has continued to focus on reducing unit operating costs, to
ensure the Company will remain a low-cost producer - the best protection
against any unforeseen economic or market conditions. Looking forward,
whilst retaining the health and safety of our employees as a top
priority, Kenmare is developing options to sustain production from our
installed facilities despite falling grades and to spread fixed costs
over a maximised production base.
Shareholder returns
The Board of Kenmare is acutely conscious of the need to provide
tangible returns on investment to shareholders. Equally, it is of
strategic importance to maintain the strength of the Company's balance
sheet to provide stability through economic and commodity cycles -
taking into account that Kenmare is for the time being a single asset,
single commodity producer in an emerging market economy.
On 1 February 2018 we commenced debt repayment, in line with the 2016
restructuring, reducing gross debt. The start of dividend payments will
be a watershed moment for the Company, to which the Board and management
are fully committed. However, the timing of commencement of dividends
needs to be carefully assessed in light of the requirements to maintain
a robust balance sheet, service our debt obligations, and maintain
covenant requirements, while also maintaining sufficient capital
investment to optimise operational cashflows. Nevertheless, we intend to
commence a legal process to facilitate the payment of dividends. This
process requires, amongst other things, shareholder approval in due
course.
Corporate governance and Board
I am pleased to welcome Peter Bacchus to the Board as Non-Executive
Director, following the retirement of Sofia Bianchi after nine years of
passionate and dedicated service to the Company, for which the Board
would like to convey its sincere appreciation.
Peter brings a high level of corporate, strategic, M&A and investment
banking expertise to the Board. He is a globally recognised mining
industry specialist, and we are delighted that Kenmare can benefit from
his input in coming years.
Continuing to deliver
Kenmare has made huge progress - increasing production, reducing costs
and positioning the business to benefit from the resurgence in product
prices. However, there is much more to be done and we look forward to
growing the business and maximising value for shareholders from the
long-life and diverse resource base in Mozambique.
Acknowledgements
I would like to thank all of our shareholders for their continued
support, and I look forward to updating you in due course on progress
with our process to facilitate payment of dividends.
Kenmare is privileged to operate in Mozambique, where we enjoy
outstanding support from government, regulatory and regional authorities,
as well as our local staff and utility suppliers.
Finally, I would like to acknowledge and applaud the exceptional efforts
of all employees, executive management, and Directors of Kenmare during
the past year of significant recovery. Their commitment and
professionalism have allowed the Company to consolidate its financial
position, plan confidently to capitalise on a unique resource base in
Mozambique and benefit from improved global product market conditions.
Steven McTiernan
Chairman
MANAGING DIRECTOR'S STATEMENT
I am pleased to report that in 2017 operations set new records for
production and shipments. The significant efforts made in increasing
production and sales volumes and reducing unit costs converged with a
recovering product market to result in US$59.6 million of EBITDA (2016:
US$5.2 million) and US$19.4 million of profit for 2017 (2016: loss
US$15.2 million). There is more to be done in 2018, but Kenmare remains
on a positive trajectory to grow production further and is working on a
set of options to deliver this growth.
Safety and community relations
The health and safety of our employees is a top priority for the
Company. In 2017, the lost time injury frequency rate (LTIFR) was 0.39
(per 200k man-hours worked), an increase from 0.20 in 2016. We are
focused on improving this performance and we are working to ensure safer
work practices become embedded.
Relations with the community remain strong and a key highlight for 2018
will be the opening of a third-level technical school funded by Kenmare
Moma Development Association (KMAD) which will provide skills training
opportunities.
Increasing production, reducing costs
Kenmare continued to grow production in 2017, as targeted, with
production volumes for all products achieving new records, particularly
ilmenite which has been operating at an annualised rate of circa 1
million tonnes per annum since mid-2016. It is planned that production
will remain at approximately this level until Wet Concentrator Plant
(WCP) B begins mining the Pilivili deposit in 2021 after completion of
its mine path in the Namalope ore zone. When WCP B moves to Pilivili,
due to the higher grade of minerals present in the ore, production of
final products is expected to increase beyond one million tonnes per
annum.
Excellent progress has been made to reduce unit operating costs in
recent years, through a combination of higher product volumes and cost
saving measures. However, WCP A and B will encounter lower mineral
grades as they enter the later years of their mine paths in the Namalope
ore zone. The impact of this reduction in grade will be offset by some
additional mining capacity, process improvements and increasing plant
operating time, facilitated by enhanced business systems and equipment
upgrades, together with continued training and up-skilling of our
workforce.
As part of our process improvements, an increase of WCP B capacity is
underway and expected to complete in Q3 2018, improving throughput of
WCP B by up to 20%. WCP A production will be supplemented with a small
additional mining and processing plant in 2019. A feasibility study to
facilitate further automation of our dredges is also underway, with the
goal of increasing throughput and reducing downtime.
Electricity power supply remained stable throughout 2017, with
diesel-powered generators only operating during the southern hemisphere
summer months to ensure stable power to the Mineral Separation Plant
(MSP).
In 2018 we will continue to focus on operational improvements and the
implementation of further cost reduction measures. We have dedicated a
significant amount of time in 2017 towards improving our business and
information systems. In 2018 we will be rolling out enhanced procurement
systems and processes resulting from an extensive review and redesign of
this aspect of our business.
Robust product markets
Prices for all products continued to increase strongly in 2017, rising
from the multi-year low reached in early 2016. The outlook for ilmenite
is positive, though price increases moderated in the second half of 2017
following very strong growth in the first half of the year. The Chinese
Government's increased commitment to enforcement of environmental
regulations and its requirement for environmentally positive process
improvements have caused some disruption in this segment of our market
as our pigment customers rush to implement required changes. However, we
believe this disruption is temporary in nature and is in the interests
of building a long-term sustainable titanium value chain in China.
The outlook for zircon is particularly strong as inventory levels have
reduced globally. Tight supply conditions are set to continue in the
coming years and bodes well for continued steady product price
improvement.
Maximising value from existing assets
The efficient deployment of capital is a key priority for the Company
and we have been examining a range of future mining options with a view
to minimising capital required while achieving our production goals.
As Kenmare's dredge mining operations enter the latter years of
operation in the Namalope ore zone, we have been carefully assessing
options for the next ore zone to be developed. In addition to the
enormous resources available at Nataka, Kenmare is fortunate to have a
set of high-quality deposits in the portfolio that provide flexibility
in our future product suite. Some of these deposits show promise of
delivering high grades and favourable mineral assemblages. The Company
has been exploring the most capital efficient ways to increase
production utilising the installed asset base to its full potential.
A pre-feasibility study for a new WCP at Pilivili, with the objective of
increasing Heavy Mineral Concentrate production to operate the MSP at
full capacity, showed strong economics. However, the relocation of WCP
B to Pilivili, rather than Nataka as previously envisaged, will achieve
this objective without the need to build a new WCP. This has the benefit
of reducing capital spend and saving operating costs. We are currently
working on this solution with Hatch, an engineering firm.
Outlook
Kenmare will increase emphasis on improving personnel and community
safety during the coming year. Delivering consecutive years of unit cost
reductions whilst increasing production has been the result of sustained
effort by the staff and Board and I would like to thank them for their
continued commitment to increasing value for shareholders. The product
market continues to show robust growth in demand, helping to support
product price increases and providing a strong platform for shareholder
returns in the future.
Michael Carvill
Managing Director
KENMARE RESOURCES PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2017
Notes 2017 2016
US$'000 US$'000
Assets
Non-current assets
Property, plant and equipment 9 793,630 793,875
Deferred tax asset 4,160 3,237
Other receivables - 278
797,790 797,390
Current assets
Inventories 52,707 47,747
Trade and other receivables 25,412 23,558
Cash and cash equivalents 10 68,774 57,786
146,893 129,091
Total assets 944,683 926,481
Equity
Capital and reserves attributable to the
Company's equity holders
Called-up share capital 11 215,046 215,046
Share premium 730,897 730,897
Retained losses (184,053) (203,424)
Other reserves 34,251 33,247
Total equity 796,141 775,766
Liabilities
Non-current liabilities
Bank loans 12 81,174 100,000
Provisions 18,622 15,855
99,796 115,855
Current liabilities
Bank loans 12 21,693 2,618
Obligations under finance lease - 264
Provisions 1,720 1,720
Other financial liabilities 8 4
Trade and other payables 25,325 30,254
48,746 34,860
Total liabilities 148,542 150,715
Total equity and liabilities 944,683 926,481
KENMARE RESOURCES PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE FINANCIAL YEARED 31 DECEMBER 2017
Notes 2017 2016
US$'000 US$'000
Revenue 2 208,299 141,491
Cost of sales 4 (156,622) (144,014)
Gross profit/(loss) 51,677 (2,523)
Other operating costs 5 (24,094) (22,835)
Operating profit/(loss) 27,583 (25,358)
Finance income 136 94
Finance costs 6 (6,798) (27,960)
Gain on extinguishment of debt - 38,255
Foreign exchange loss (2,473) (2,175)
Profit/(loss) before tax 18,448 (17,144)
Income tax credit 7 923 1,917
Profit/(loss) for the financial year
and total comprehensive income for the
financial year 19,371 (15,227)
Attributable to equity holders 19,371 (15,227)
US$ per share US$ per share
Profit/(loss) per share: Basic 8 0.18 (0.28)
Profit/(loss) per share: Diluted 8 0.18 (0.28)
KENMARE RESOURCES PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE FINANCIAL YEARED 31 DECEMBER 2017
Capital Capital
Called-Up Conversion Redemption Share-Based
Share Share Reserve Reserve Retained Payment
Capital Premium Fund Fund Losses Reserve Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Balance at 1
January
2016 214,941 431,380 754 10,582 (175,651) 21,468 503,474
Loss for the
financial
year - - - - (15,227) - (15,227)
Share-based
payments - - - - - 443 443
Equitisation
of loans and
loan fees 16 44,244 - - - - 44,260
Equity issued 89 255,273 - - (12,546) - 242,816
Balance at 1
January
2017 215,046 730,897 754 10,582 (203,424) 21,911 775,766
Profit for
the
financial
year - - - - 19,371 - 19,371
Share-based
payments - - - - - 1,004 1,004
Balance at 31
December
2017 215,046 730,897 754 10,582 (184,053) 22,915 796,141
Capital Conversion Reserve Fund
The capital conversion reserve fund arose from the renominalisation of
the Company's share capital from Irish Punts to Euros.
Capital Redemption Reserve Fund
The deferred shares of EUR0.25 were created in 1991 by subdividing each
existing ordinary share of IR25 pence into one deferred share of IR20
pence and one new ordinary share of IR5 pence. The deferred shares were
non-voting, carried no dividend rights, and the Company had the right to
purchase any or all of these shares at a price not exceeding EUR0.01 per
share for all the deferred shares so purchased or could execute a
transfer of such shares without making any payment to the holders.
On 12 October 2015, it was resolved that the Company acquire all of the
48,031,467 deferred shares of EUR0.25 each in the capital of the Company
in issue by transfer or surrender to the Company otherwise than for
valuable consideration in accordance with Section 102(1)(a) of the
Companies Act 2014 and Article 3(ii) of the Articles of Association of
the Company and, in accordance with Section 106(1) of the Companies Act
2014, cancel such deferred shares.
Retained Losses
Retained losses comprise the expenses on the issue of equity in July
2016 and accumulated profit and losses in the current and prior
financial years.
Share-Based Payment Reserve
The share-based payment reserve arises on the grant of share options and
shares to certain Directors, employees and consultants under the share
option scheme, the Kenmare Incentive Plan and the Kenmare Restricted
Share Plan.
KENMARE RESOURCES PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE FINANCIAL YEARED 31 DECEMBER 2017
Notes 2017 2016
US$'000 US$'000
Operating activities
Profit/(loss) for the financial year before tax 18,448 (17,144)
Adjustment for:
Foreign exchange movement 2,473 2,175
Share-based payments 5 1,004 443
Finance income (136) (76)
Finance costs 6 6,798 27,960
Gain on extinguishment of debt - (38,255)
Depreciation 9 32,000 30,613
Disposals of property, plant and equipment 9 - 224
Increase/(decrease) in other financial liabilities 4 (18)
(Decrease)/increase in provisions (315) 113
Operating cash flow 60,276 6,035
Increase in inventories (4,960) (1,519)
Increase in trade and other receivables (1,576) (2,919)
Decrease in trade and other payables (8,481) (4,573)
Cash from/(used in) operations 45,259 (2,976)
Interest received 136 76
Interest paid 12 (6,051) (2,775)
Net cash from/(used in) operating activities 39,344 (5,675)
Investing activities
Additions to property, plant and equipment 9 (28,055) (6,697)
Net cash used in investing activities (28,055) (6,697)
Financing activities
Proceeds from the issue of shares 11 - 254,762
Cost of the issue of shares 11 - (12,546)
Repayment of borrowings 12 - (179,555)
Loan fees and expenses 12 - (6,699)
Payment of obligations under finance leases (280) (560)
Net cash (used in)/from financing activities (280) 55,402
Net increase in cash and cash equivalents 11,009 43,030
Cash and cash equivalents at the beginning of the
financial year 57,786 14,352
Effect of exchange rate changes on cash and cash
equivalents (21) 404
Cash and cash equivalents at the end of the financial
year 10 68,774 57,786
1. BASIS OF ACCOUNTING AND PREPARTION OF FINANCIAL INFORMATION
On 13 March 2018, the Directors approved the preliminary results for
publication. While the unaudited consolidated financial statements for
the year ended 31 December 2017, from which the preliminary results have
been extracted, are prepared in accordance with International Financial
Reporting Standards (IFRS) as adopted by the European Union, these
preliminary results do not contain sufficient information to comply with
IFRS. The Directors expect to publish the full financial statements that
comply with IFRS as adopted by the European Union in March 2018.
Based on the Group's cash flow forecast, the Directors believe that the
Group has adequate resources for the foreseeable future and continue to
adopt the going concern basis of accounting in preparing the annual
financial statements.
The auditors have not yet issued their audit opinion on the financial
statements in respect of the year ended 31 December 2017.
The financial information included within this unaudited preliminary
results statement for the years ended 31 December 2016 and 31 December
2017 does not constitute the statutory financial statements of the
Company within the meaning of section 293 of the Companies Act 2014. The
Group financial information in this preliminary statement for the year
ended 31 December 2017 is unaudited. A copy of the statutory financial
statements in respect of the year ended 31 December 2017 will be annexed
to the next annual return and filed with the Registrar of Companies.
The Group financial information for the year ended 31 December 2016
included in this preliminary statement represents an abbreviated version
of the Company's group financial statements for that year. The
statutory financial statements for the Group for the year ended 31
December 2016, upon which the auditors have issued an unqualified
opinion, but with an emphasis of matter drawing attention to the
recoverability of assets of the Group, were annexed to the annual return
of the company and filed with the Registrar of Companies.
The accounting policies applied are consistent with those adopted and
disclosed in the Group's financial statements for the year ended 31
December 2016. There have been a number of amendments to accounting
standards and new interpretations issued by the International Accounting
Standards Board which were applicable from 1 January 2017; however,
these have not had a material impact on the accounting policies, methods
of computation or presentation applied by the Group.
2. REVENUE
2017 2016
US$'000 US$'000
Sale of mineral products 208,299 141,491
During the financial year, the Group sold 1,040,400 tonnes (2016:
1,024,200 tonnes) of finished products ilmenite, rutile and zircon to
customers at a sales value of US$208.3 million (2016: US$141.5 million).
3. SEGMENT REPORTING
Information on the operations of the Moma Titanium Minerals Mine in
Mozambique is reported to the Board for the purposes of resource
allocation and assessment of segment performance. Information regarding
the Group's operating segment is reported below.
Segment revenues and results
2017 2016
Moma Titanium Minerals Mine US$'000 US$'000
Revenue 208,299 141,491
Cost of sales (156,622) (144,014)
Gross profit/(loss) 51,677 (2,523)
Other operating costs (21,454) (20,051)
Segment operating profit/(loss) 30,223 (22,574)
Other corporate operating costs (2,640) (2,784)
Group operating profit/(loss) 27,583 (25,358)
Finance income 136 94
Finance expenses (6,798) (27,960)
Gain on extinguishment of debt - 38,255
Foreign exchange loss (2,473) (2,175)
Profit/(loss) before tax 18,448 (17,144)
Income tax credit 923 1,917
Profit/(loss) for the financial year 19,371 (15,227)
Segment assets
Moma Titanium Minerals Mine assets 885,892 868,400
Corporate assets 58,791 58,081
Total assets 944,683 926,481
Segment liabilities
Moma Titanium Minerals Mine liabilities 143,575 146,070
Corporate liabilities 4,967 4,645
Total liabilities 148,542 150,715
Other segment information
Depreciation and amortisation
Moma Titanium Minerals Mine 31,997 30,610
Corporate 3 3
Total 32,000 30,613
Additions to non-current assets
Moma Titanium Minerals Mine 28,550 6,697
Corporate 601 -
Total 29,151 6,697
Revenue from major products
2017 2016
US$'000 US$'000
Sale of mineral products (ilmenite, zircon and rutile) 208,299 141,491
Geographical information
2017 2016
Revenue from external customers US$'000 US$'000
Europe 52,099 36,502
Asia 119,216 69,164
North America 36,984 35,825
Total 208,299 141,491
The Group's revenue from external customers is generated by the Moma
Titanium Minerals Mine, the non-current assets of which are US$797.2
million (2016: US$797.4 million).
Cost of sales for the financial year amounted to US$156.6 million (2016:
US$144.0 million), including depreciation and amortisation of US$27.1
million (2016: US$25.3 million).
Information about major customers
Included in revenues are US$72.5 million (2016: US$35.8 million) from
sales to the Group's largest customer, US$37.0 million (2016: US$20.5
million) from sales to the Group's second largest customer and US$23.9
million (2016: US$18.3 million) from sales to the Group's third largest
customer. All revenues are generated by the Moma Titanium Minerals Mine.
4. COST OF SALES
2017 2016
US$'000 US$'000
Opening stock of mineral products 30,631 27,643
Production costs 129,816 121,684
Depreciation 27,057 25,318
Closing stock of mineral products (30,882) (30,631)
Total 156,622 144,014
Mineral products consist of finished products, intermediate magnetic
concentrate and heavy mineral concentrate. There was a higher
depreciation and amortisation charge as a result of the increased
production during the year. Mineral stock value increased by US$0.3
million (2016: US$3.0 million increase).
5. OTHER OPERATING COSTS
2017 2016
US$'000 US$'000
Distribution costs 11,440 11,287
Freight and demurrage costs 5,538 5,410
Administration costs 3,350 2,893
Arbitration costs 3,766 3,245
Total 24,094 22,835
Included in administration costs are:
Share-based payments 1,004 473
Distribution costs of US$11.4 million (2016: US$11.3 million) represent
the cost of running the Mine's finished product storage, jetty and
marine fleet. Included in distribution costs is depreciation of US$4.9
million (2016: US$5.3 million). Freight costs of US$5.5 million (2016:
US$5.4 million) are reimbursable by customers or factored into the sales
price for product delivered to customers on a CIF or CFR basis.
Demurrage costs were US$0.05 million (2016: US$0.01 million) during the
financial year. Administration costs of US$3.4 million (2016: US$2.9
million) are the Group administration costs and include a share-based
payment of US$1.0 million (2016: US$0.5 million). There were arbitration
costs incurred in the financial year of US$3.8 million (2016: US$3.2
million). No further costs are expected in connection with the
underlying dispute.
6. FINANCE COSTS
2017 2016
US$'000 US$'000
Interest on bank borrowings 6,300 23,888
Other financing fees - 3,486
Finance lease interest 16 81
Change in fair value of warrants 4 -
Mine closure provision unwinding of the discount 478 505
Total 6,798 27,960
The interest on all Group borrowings has been expensed in the financial
year.
7. INCOME TAX EXPENSE
2017 2016
US$'000 US$'000
Corporation tax - -
Deferred tax 923 1,917
Total 923 1,917
Reconciliation of effective tax rate
Profit/(loss) before tax 18,448 (17,144)
Profit/(loss) before tax multiplied by the applicable
tax rate (12.5%) 2,306 (2,143)
Differences in effective tax rates on overseas earnings (2,306) 2,143
Applied losses (1,157) -
Recognition of deferred tax asset 2,080 1,917
Total 923 1,917
GROUP
No charge to corporation tax arises in the financial years ended 31
December 2017 and 31 December 2016 as there were no taxable profits in
either financial year.
At the statement of financial position date Kenmare Moma Mining
(Mauritius) Limited had unused tax losses of US$11.9 million (2016:
US$18.5 million) available for offset against future profits. The tax
rate applicable to these losses is 35% as the 50% reduction in the
corporate tax applicable to Kenmare Moma Mining (Mauritius) Limited in
the initial ten-year period ended in 2017. As a result, the deferred tax
asset was increased by US$2.1 million. During the year US$1.2 million
deferred tax charges were recognised as tax losses of US$6.9 million
were utilised and the related deferred tax asset was reduced. In 2016,
an asset of US$1.9 million was recognised for losses available for
offset against future profits. Based on the forecast at the year end for
Kenmare Moma Mining (Mauritius) Limited, profits are expected to
materialise within the next three years to allow the balance of losses
be utilised.
The fiscal regime applicable to the mining activities of Kenmare Moma
Mining (Mauritius) Limited allows for a 50% reduction in the corporate
tax in the initial ten-year period of production following start-up
(2007) and charges a royalty of 3% based on heavy mineral concentrate
sold to Kenmare Moma Processing (Mauritius) Limited. The royalty charge
payable to the Government of Mozambique for the financial year ended 31
December 2017 was US$2.9 million (2016: US$2.5 million). Under the
fiscal regime applicable to mining activities, Kenmare Moma Mining
(Mauritius) Limited is exempted from import and export taxes and VAT on
imports, and accelerated depreciation is permitted. Whilst withholding
tax is levied on certain payments to non-residents, mining companies are
exempt from withholding tax on dividends for the first ten years or
until their investment is recovered, whichever is earlier. The
withholding tax charge payable to the Government of Mozambique for the
financial year ended 31 December 2017 was US$0.9 million (2016: US$0.7
million).
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amount of assets and liabilities in the
financial statements and the corresponding tax bases used in the
computation of taxable profit and is accounted for using the statement
of financial position liability method. The fiscal regime applicable to
mining allows for the option to use accumulation of exploration and
development expense and optional depreciation at 25% per annum with tax
losses allowed to be carried forward for three years.
Kenmare Moma Processing (Mauritius) Limited has Industrial Free Zone
(IFZ) status. As an IFZ company, it is exempted from import and export
taxes, VAT and other corporation taxes. A revenue tax of 1% is charged
after six years of operation, which became payable in 2013. The revenue
tax payable to the Government of Mozambique for the financial year ended
31 December 2017 was US$2.1 million (2016: US$1.4 million). There is no
dividend withholding tax under the IFZ regime.
8. EARNINGS PER SHARE
The calculation of the basic and diluted earnings per share attributable
to the ordinary equity holders of the parent is based on the following
data:
2017 2016
US$'000 US$'000
Profit/(loss) for the financial year attributable
to equity holders of the parent 19,371 (15,227)
2017 2016
Number of Number of
shares shares
Weighted average number of issued ordinary shares
for the purpose of basic earnings per share 109,601,551 55,253,893
Effect of dilutive potential ordinary shares:
Share awards 412,101 -
Weighted average number of ordinary shares for the
purposes of diluted earnings per share 110,013,652 55,253,893
2017 2016
US$ per share US$ per share
Earnings per share: basic 0.18 (0.28)
Earnings per share: diluted 0.18 (0.28)
In 2016, the basic earnings per share and the diluted earnings per share
are the same as the outstanding share options, share awards and warrants
are anti-dilutive.
On 26 July 2016, there was a capital reorganisation which resulted in a
one for two hundred consolidation of the existing ordinary shares
whereby the ordinary shares and the new ordinary shares have a nominal
value of EUR0.001 each. 2,781,905,503 deferred shares of EUR0.059995
each were created by subdividing each existing ordinary share of EUR0.06
into one deferred share of EUR0.059995 and one new ordinary share of
EUR0.001. On 26 July 2016, 81,368,822 new ordinary shares of EUR0.001
were issued by way of a placing and open offer which raised US$254.8
million. On the 28 July 2016, 14,323,202 new ordinary shares were issued
to Lenders to discharge debt and fees.
9. PROPERTY, PLANT AND EQUIPMENT
Plant & Development Construction Other Total
Equipment Expenditure In Progress Assets
US$'000 US$'000 US$'000 US$'000 US$'000
Cost
At 1 January 2016 786,057 249,984 5,497 53,688 1,095,226
Transfer from
construction in
progress 5,897 - (6,776) 879 -
Additions during the
financial year - - 6,697 - 6,697
Disposals (263) - - (731) (994)
Adjustments* (16,946) - - - (16,946)
At 1 January 2017 774,745 249,984 5,418 53,836 1,083,983
Transfer from
construction in
progress 1,786 342 (3,166) 1,038 -
Additions during the
financial year 557 - 27,993 601 29,151
Disposals - - - (375) (375)
Adjustments** 3,083 - - (479) 2,604
At 31 December 2017 780,171 250,326 30,245 54,621 1,115,363
Accumulated
Depreciation
At 1 January 2016 122,354 110,075 - 27,836 260,265
Charge for the
financial year 21,372 4,905 - 4,336 30,613
Disposals (91) - - (679) (770)
At 1 January 2017 143,635 114,980 - 31,493 290,108
Charge for the
financial year 22,264 6,043 - 3,693 32,000
Disposals - - - (375) (375)
At 31 December 2017 165,899 121,023 - 34,811 321,733
Carrying Amount
At 31 December 2017 614,272 129,303 30,245 19,810 793,630
At 31 December 2016 631,110 135,004 5,418 22,343 793,875
During the financial year the Group carried out an impairment review of
property, plant and equipment. The cash-generating unit for the purpose
of impairment testing is the Moma Titanium Minerals Mine. The basis on
which the recoverable amount of the Moma Titanium Minerals Mine is
assessed is its value-in-use. The cash flow forecast employed for the
value-in-use computation is from a life of mine financial model. The
recoverable amount obtained from the financial model represents the
present value of the future pre-tax, pre-finance cash flows discounted
at 11.5%.
Key assumptions include the following:
-- The discount rate is based on the Group's weighted average cost of
capital. This rate is a best estimate of the current market assessment of
the time value of money and the risks specific to the Mine, taking into
consideration country risk, currency risk and price risk. The factors
making up the cost of equity, cost of debt and capital structure have
changed from the prior year review resulting in a discount rate of 11.5%.
Using a discount rate of 11.5%, the recoverable amount is greater than
the carrying amount by US$151.3 million. The discount rate is a
significant factor in determining the recoverable amount. A 1% increase
in the discount rate to 12.5% which management believes could be a
reasonably possible change in this assumption, would result in the
recoverable amount being greater than the carrying amount by US$81.3
million. A 1% increase in the discount rate in the prior year to 12%
would have resulted in the recoverable amount being greater than the
carrying amount by US$47.5 million. The improvement in the recoverable
amount from the prior year is a result of increased production in the
near term as a result of the change in mine plan assumptions detailed
below and increased forecast pricing particularly for zircon.
-- In the prior year the mine plan was based on the Namalope and Nataka
proved and probable reserves with the forecast running to 2056. The move
of both mining plants into the adjacent Nataka deposit after depletion of
Namalope (2021/22 for WCP B and 2025/2026 for WCP A) was primarily driven
by the size, proximity and longevity of the Nataka deposit. The Group has
developed an increasing understanding of other resources within the
Group's portfolio. Alternative mine plans to Nataka are being explored
which may reduce future capital costs and production risks and enhance
shareholder value. The current mine plan assumption has WCP B moving to
the Pilivili deposit in 2020 where the plant can take advantage of high
ore grades early in the Pilivili mine plan to increase HMC production.
The forecast life of mine runs to 2056, unchanged from the prior year
review.
-- Average annual production is approximately 0.9 million tonnes (2016: 0.9
million tonnes) of ilmenite plus co-products zircon and rutile over the
life of the mine. This mine plan does not include investment in
additional mining capacity. Certain minimum stocks of final and
intermediate products are assumed to be maintained at period ends. The
average annual production of final products has not changed from the
prior year.
-- Product sales prices are based on contract prices as stipulated in
marketing agreements with customers, or where contracts are based on
market prices or production is not presently contracted, prices are
forecast by the Group taking into account independent titanium mineral
sands expertise and management expectations including general inflation
of 2% per annum. Average forecast product sales prices have increased
slightly over the life of mine from the prior year-end review. A 7%
reduction in average sales prices over the life of mine reduces the
recoverable amount by US$151.3 million.
-- Operating costs are based on approved budget costs for 2018 taking into
account the current running costs of the Mine and escalated by 2% per
annum thereafter. Average forecast operating costs have increased from
the prior year-end review as a result of increased operating costs in
2017, which formed the basis for the 2018 budget and life of mine
forecast thereafter. A 15% increase in operating costs over the life of
mine reduces the recoverable amount by US$151.3 million.
-- Sustaining capital costs are based on a life of mine capital plan
considering inflation at 2% per annum from 2018. Average forecast
sustaining capital costs have remained unchanged from the prior year-end
review as the sustaining capital required to maintain the existing plant
over the life of mine has remained unchanged. The forecast takes into
account reasonable cost increases and therefore a sensitivity to this
assumption has not been applied which would give rise to a reduction in
the recoverable amount.
As a result of the review no impairment provision was recognised in the
current financial year. No impairment was recognised in the prior
financial year. Given the sensitivities of the forecast to the discount
rate, pricing and to a lesser extent operating costs the impairment loss
of US$64.8 million which was recognised in the consolidated statement of
comprehensive income in 2014 is not reversed.
Depreciation during the year increased to US$32.0 million (2016: US$30.6
million) as a result of the increase in production.
*Kenmare Resources plc's operating subsidiaries Kenmare Moma Mining
(Mauritius) Limited and Kenmare Moma Processing (Mauritius) Limited
(together, the "Project Companies") were engaged in arbitration
proceedings initiated by certain members of the Aveng Group (those
members, together, "Aveng") in relation to the performance and
completion of certain engineering, procurement and construction
management contracts entered into in 2010 in connection with the
expansion of the mine facilities. Aveng claimed that it was owed certain
amounts in respect of unpaid professional fees, plus interest. The
Project Companies counterclaimed for compensation for losses resulting
from Aveng's contractual breaches, substantially in excess of the
amounts claimed by Aveng.
The arbitral tribunal notified its award on the 23 December 2016. The
tribunal determined that, due to Aveng's breaches, the final payment
sought by Aveng should be reduced by the maximum amount allowable under
the contracts, i.e. ZAR150 million. The net effect of the Tribunal's
finding resulted in the Project Companies making a payment of US$4.9
million (ZAR56 million, plus interest accrued of ZAR11 million) in
January 2017. There was an adjustment of US$10.1 million to property,
plant and equipment as a result of the arbitral tribunal award, which
resulted in a reduction in the amount payable to Aveng and therefore a
reduction in the amount previously capitalised.
There was also an adjustment to the mine closure cost of US$6.9 million
during 2016 as a result of a change in the estimated life of mine. The
aggregate of US$10.1 million adjustment to plant and equipment and the
US$6.9 million adjustment to the mine closure cost is US$17.0 million.
**There was an adjustment to the mine closure cost of US$2.6 million
during 2017 as result of a change in the discount rate used to estimate
the mine closure provision. There was also a reclassification of US$0.5
million from other assets to plant and equipment during the year.
Included in other assets is an amount of US$0.6 million (2016: nil) in
respect of leasehold property of the Company. There was no depreciation
during the year on the leasehold property.
Included in plant and equipment are capital spares of US$2.6 million
(2016: US$2.1 million).
During the year there were disposals of property, plant and equipment of
US$0.4 million (2016: US$0.2 million).
Substantially, all the property, plant and equipment of the Group is or
will be mortgaged, pledged or otherwise secured to provide collateral
for the Group's Senior and Subordinated Loans as detailed in Note 12.
The recovery of property, plant and equipment is dependent upon the
successful operation of the Moma Titanium Minerals Mine; the realisation
of the cash flow forecast assumptions as set out in this note would
result in the recovery of such amounts. The Directors are satisfied
that at the statement of financial position date, the recoverable amount
of property, plant and equipment exceeds its carrying amount and, based
on the planned mine production levels that, the Moma Titanium Minerals
Mine will achieve positive cash flows.
10. CASH AND CASH EQUIVALENTS
2017 2016
US$'000 US$'000
Immediately available without restriction 57,866 53,810
Contingency Reserve Account 2 2
Project Companies' Accounts 10,906 3,974
68,774 57,786
Cash and cash equivalents comprise cash balances held for the purposes
of meeting short-term cash commitments and investments which are readily
convertible to a known amount of cash and are subject to an
insignificant risk of change in value. Where investments are categorised
as cash equivalents, the related balances have a maturity of three
months or less from the date of investment.
The Contingency Reserve Account ("CRA") is an account established under
a cash collateral and shareholder funding deed to provide for
shareholder funding to the Project Companies and to secure the
obligations of the Company and Congolone Heavy Minerals Limited (a
wholly owned subsidiary undertaking) under the Completion Agreement.
Interest rate risk
Cash at bank earns interest at variable rates based on daily bank
deposit rates, which may be zero. Short-term deposits are made for
varying periods of between one day and three months, depending on the
cash requirements of the Group, and earn interest at the respective
short-term deposit rates. The interest rate profile of the Group's cash
balances at the financial year end was as follows:
2017 2016
US$'000 US$'000
Cash and cash equivalents at variable interest rate 52,205 56,634
Cash at bank on which no interest is received 16,569 1,152
68,774 57,786
Currency risk
The currency profile of cash and cash equivalents at the financial year
end is as follows:
2017 2016
US$'000 US$'000
US Dollar 66,721 52,187
Sterling 957 2,563
Euro 583 2,699
Mozambican Metical 460 276
Renminbi 24 32
Australian Dollars 19 20
South African Rand 10 9
68,774 57,786
Fluctuations in the currencies noted above will impact on the Group's
financial results.
Credit risk
The credit risk on cash and cash equivalents is limited because funds
available to the Group are deposited with banks with high credit ratings
assigned by international credit rating agencies. For deposits in excess
of US$50 million the Group requires that the institution has an A
(S&P)/A2 (Moody's) long-term rating. For deposits in excess of US$20
million or South African Rand-denominated deposits, the Group requires
that the institution has a BBB+ (S&P)/Baa1 (Moody's) long-term rating.
US$53.7 million of the bank deposits are with Barclays Bank plc, which
has a long-term credit rating of A Stable (S&P)/A1 Negative (Moody's).
US$14.6 million of the bank deposits are with HSBC plc which has a
long-term credit rating of A Stable (S&P)/A2 Negative (Moody's).
11. CALLED-UP SHARE CAPITAL
2017 2016
EUR'000 EUR'000
Authorised share capital
181,000,000 ordinary shares of EUR0.001 each 181 181
4,000,000,000 deferred shares of EUR0.059995 each 239,980 239,980
240,161 240,161
2017 2016
US$'000 US$'000
Allotted, called up and fully paid
Ordinary shares
Opening balance
109,601,551 ordinary shares of EUR0.001 each 120 -
2,781,905,503 deferred shares of EUR0.059995 each 214,926 214,941
215,046 214,941
Share consolidation
13,909,527 ordinary shares of EUR0.001 each - 15
2,781,905,503 deferred shares of EUR0.059995 each - 214,926
Shares issued
95,692,024 ordinary shares of EUR0.001 each - 105
Closing balance
109,601,551 ordinary shares of EUR0.001 each 120 120
2,781,905,503 deferred shares of EUR0.059995 each 214,926 214,926
Closing balance 215,046 215,046
Total called-up share capital 215,046 215,046
On 26 July 2016, there was a capital reorganisation which resulted in a
one for two hundred consolidation of the existing ordinary shares
whereby the ordinary shares and the new ordinary shares have a nominal
value of EUR0.001 each. 2,781,905,503 deferred shares of EUR0.059995
each were created as part of the capital restructuring by subdividing
each existing ordinary share of EUR0.06 into one deferred share of
EUR0.059995 and one new ordinary share of EUR0.001. The deferred shares
have no voting rights, dividend rights and, in effect, no rights on a
return of capital. The deferred shares may be acquired by the Company
for no consideration and cancelled.
On 26 July 2016, 81,368,822 new ordinary shares of EUR0.001 were issued
by way of a placing and open offer which raised US$254.7 million.
US$0.1 million of the issue has been credited to share capital and
US$255.3 million has been credited to share premium. The cost of issue
of US$12.5 million has been recognised in retained losses.
On 28 July 2016, 6,527,771 new ordinary shares of EUR0.001 were issued
to Absa, EAIF, EIB and FMO, discharging US$20.4 million of debt under
their US$40.8 million underwriting commitment. 7,603,860 new ordinary
shares of EUR0.001 each were issued to Absa, EAIF, EIB and FMO,
discharging US$23.8 million of senior and subordinated loans under the
debt reduction equitisation. 191,571 new ordinary shares of EUR0.001
each were also issued to Absa, discharging a loan amendment fee of
US$0.6 million. US$0.01 million of the issue has been credited to share
capital and US$44.8 million has been credited to share premium.
12. BANK LOANS
2017 2016
US$'000 US$'000
Project Loans
Senior Loans 25,902 25,857
Subordinated Loans 76,965 76,761
Total Project Loans 102,867 102,618
The borrowings are repayable as follows:
Within one year 21,693 2,618
In the second year 19,048 19,048
In the third to fifth years inclusive 62,126 58,730
After five years - 22,222
102,867 102,618
Less: amount due for settlement within twelve months (21,693) (2,618)
Amount due for settlement after twelve months 81,174 100,000
Project Loans
Balance at 1 January 102,618 367,811
Loan interest accrued 6,300 23,888
Loan interest paid (6,051) (2,775)
Project Loans novated to Kenmare Resources plc - (292,449)
Foreign exchange movement - 6,186
Other finance fees - (43)
Balance at 31 December 102,867 102,618
Project Loans
Project Loans have been made to the Mozambique branches of Kenmare Moma
Mining (Mauritius) Limited and Kenmare Moma Processing (Mauritius)
Limited (the "Project Companies"). The Project Loans are secured by
substantially all rights and assets of the Project Companies, and,
amongst other things, the Group's shares in the Project Companies,
substantially all of the Group's cash balances and substantially all of
the Group's intercompany loans.
On 22 June 2016, the Group and the Lenders entered into an Amendment,
Repayment and Equitisation Agreement (AREA) for purposes of a Group
capital restructuring and debt equitisation. The Group also entered into
Amended Financing Agreements, setting out the terms and conditions
applicable to the US$100 million residual debt following the debt
restructuring. Details of these agreements are set out below.
Amended financing agreements
On 28 July 2016, the debt restructuring was implemented pursuant, to
which the terms of the residual debt of US$100 million became effective.
The residual debt was in two tranches: US$25.4 million senior debt and
US$74.6 million subordinated debt.
Senior debt ranks in priority to subordinated debt in repayment, subject
to the waterfall provision summarised below, on insolvency of the Group
and on enforcement of security.
Voting thresholds are calculated on the basis of aggregate outstanding
debt, being the aggregate of outstanding senior debt and outstanding
subordinated debt. Decisions are taken by majority Lenders (Lenders
whose principal amount of outstanding debt aggregate more than 50.1% of
all outstanding debt) or supermajority Lenders (Lenders whose principal
amount of outstanding debt aggregate more than 66.7% of all outstanding
debt).
Senior debt
The final maturity date of the senior debt is 1 February 2022. Interest
on the senior debt is payable in cash on each semi-annual payment date
(1 February and 1 August). The interest rate on each tranche of senior
debt is LIBOR plus a margin of 3.00% from and including 28 July 2016 to
and including 31 January 2020, and 3.75% thereafter.
Scheduled repayment of the senior debt and subordinated debt is based on
the following repayment schedule, the percentage being applied to total
senior and subordinated debt outstanding on 28 July 2016 of US$100
million, in each case subject to the waterfall provisions summarised
below:
Payment date Principal amount to be repaid (%)
1 Feb 2018 9.52381
1 Aug 2018 9.52381
1 Feb 2019 9.52381
1 Aug 2019 9.52381
1 Feb 2020 9.52381
1 Aug 2020 9.52381
1 Feb 2021 9.52381
1 Aug 2021 11.11111
1 Feb 2022 22.22222
Each principal instalment is allocated 50% to senior debt until senior
debt is fully repaid (provided that once the amount of Absa senior debt
is reduced to US$10 million, Absa ceases to participate in the senior
debt instalment and thereafter participates in the subordinated
instalment) with the balance being applied to subordinated debt. The
effect of the sharing provision is that senior debt, other than Absa's
senior debt, will be repaid by 1 August 2019 under the agreed
amortisation schedule.
In addition to the scheduled instalments of senior debt, prepayments
based on 25% of cash available for restricted payments are required
under a cash sweep mechanism, commencing 1 February 2018. Until the
senior debt has been repaid in full, 50% of the prepayments will be
allocated to senior debt (provided that once the amount of Absa senior
debt is reduced to US$10 million, Absa ceases to participate in the
senior debt prepayments and thereafter participates in the subordinated
debt prepayments) with the balance applied to prepayments of
subordinated debt. Senior debt prepayments are applied in inverse order
of maturity.
Subordinated debt
The final maturity date of the subordinated debt is 1 February 2022.
Interest on the subordinated debt is payable in cash on 1 February and 1
August. The interest rate on subordinated debt is LIBOR plus a margin of
4.75% from and including 28 July 2016 to and including 31 January 2020,
and 5.50% thereafter. Subordinated Lenders will receive additional
interest allocated pro rata to principal amounts outstanding equal to
the difference between (i) interest on the senior loans calculated on
the basis of subordinated loan margins and (ii) actual interest on the
senior loans. Taken together, the margin on the senior and subordinated
loans is thus 4.75% from and including 28 July 2016 to and including 31
January 2020, and 5.50% thereafter.
As mentioned above, scheduled principal instalments on subordinated
loans will equal the total principal instalment due on a payment date
less the principal instalment on senior loans. In addition to the
scheduled instalments, prepayments based on 25% cash available for
restricted payments less senior debt prepayments are required under a
cash sweep mechanism, commencing 1 February 2018. Subordinated debt
prepayments are applied in inverse order of maturity.
Group borrowings interest, currency and liquidity risk
The loan facilities are arranged at variable rates and expose the Group
to cash flow interest rate risk. Variable rates are based on six-month
LIBOR. The average effective borrowing rate at financial year end was
5.7% (2016: 5.2%). The interest rate profile of the Group's loan
balances at the financial year end was as follows:
2017 2016
US$'000 US$'000
Variable rate debt 102,867 102,618
The fair value of the Group borrowings of US$102.5 million (2016:
US$103.1 million) has been calculated by discounting the expected future
cash flows at a market rate of 6%. The 6% market rate was estimated by
reviewing borrowing rates of the mining sector and other relevant market
yields. For B+ to B- rated debt the borrowing rates are in the range of
5 to 6%. Given the 2016 restructuring, the Group is deemed to be in this
range of credit rating.
Under the assumption that all other variables remain constant, a 1%
change in the 6-month LIBOR rate results in a US$1.0 million (2016:
US$1.0 million) change in finance costs for the financial year.
The currency profile of loans at the financial year end is as follows:
2017 2016
US$'000 US$'000
US Dollars 102,867 102,618
On 28 July 2016, the debt restructuring was implemented pursuant to
which all debt is now denominated in US Dollars.
The above sensitivity analyses are estimates of the impact of market
risks assuming the specified change occurs. Actual results in the future
may differ materially from these results due to developments in the
global financial markets which may cause fluctuations in interest and
exchange rates to vary from the assumptions made above and therefore
should not be considered a projection of likely future events.
13. 2017 ANNUAL REPORT AND ACCOUNTS
The Annual Report and Accounts will be posted to shareholders before 30
April 2018.
Glossary - Alternative Performance Measures
Certain financial measures set out in our preliminary results for the
year endedAnnual Report to 31 December 2017 are not defined under
International Financial Reporting Standards (IFRSs), but represent
additional measures used by the Board to assess performance and for
reporting both internally and to shareholders and other external users.
Presentation of these Alternative Performance Measures (APMs) provides
useful supplemental information which, when viewed in conjunction with
the Company's IFRS financial information, allows for a more meaningful
understanding of the underlying financial and operating performance of
the Group.
These non-IFRS measures should not be considered as an alternative to
financial measures as defined under IFRSs.
Descriptions of the APMs included in this report, as well as their
relevance for the Group, are disclosed below.
APM Description Relevance
EBITDA Operating profit/loss before depreciation and Eliminates the effects of financing and accounting
amortisation decisions to allow assessment of the profitability
and performance of the Group
Capital costs Additions to property, plant and equipment in the Provides the amount spent by the Company on additions
period to property, plant and equipment in the period
Cash operating cost per tonne of finished product Total costs less freight and other non-cash costs, Eliminates the non-cash impact on costs to identify
produced including inventory movements, divided by final product the actual cash outlay for production and, as production
production (tonnes) levels increase or decrease, highlights operational
performance by providing a comparable cash cost per
tonne of product produced over time
Net debt Bank loans before loan amendment fees and expenses Measures the Group's ability to repay its debts if
net of cash and cash equivalents they were to fall due immediately, and aids in developing
an understanding of the leveraging of the Group
Mining - HMC produced Heavy mineral concentrate extracted from mineral sands Provides a measure of heavy mineral concentrate extracted
deposits and which include ilmenite, zircon, rutile from the Mine
and other heavy minerals and silica
Processing - finished products produced Finished products produced by the mineral separation Provides a measure of finished products produced from
process the processing plants
Marketing - finished products shipped Finished products shipped to customers during the Provides a measure of finished products shipped to
period customers
LTIFR Lost time injury frequency rate Measures the number of injuries causing lost time
per 200,000 man hours worked on site
AI All injuries Provides the number of injuries at the Mine in the
year
EBITDA
2012 2013 2014 2015 2016 2017
US$m US$m US$m US$m US$m US$m
Operating profit/(loss) 80.4 4.7 (31.5) (47.3) (25.4) 27.6
Depreciation and amortisation 18.5 24.3 40.9 35.8 30.6 32.0
EBITDA 98.9 29.0 9.4 (11.5) 5.2 59.6
Cash operating cost per tonne of finished product
2012 2013 2014 2015 2016 2017
US$m US$m US$m US$m US$m US$m
Cost of sales 134.5 113.7 173.4 168.1 144.0 156.6
Other operating costs 19.7 19.5 32.4 21.8 22.8 24.1
Total operating costs 154.2 133.2 205.8 189.9 166.8 180.7
Freight charges (3.2) (3.4) (8.2) (3.7) (5.4) (5.5)
Total operating costs
less freight 151.0 129.8 197.6 186.2 161.4 175.2
Non-cash costs
Depreciation and
amortisation (18.5) (24.3) (40.9) (35.8) (30.6) (32.0)
Share-based payments (3.2) (0.6) (1.4) 0.7 (0.4) (1.0)
Costs capitalised - 27.2 - - -
Mineral product
movements (5.9) 18.3 17.7 (14.7) 3.0 0.3
Adjusted cash
operating costs 123.4 150.4 173.0 136.4 133.4 142.5
Final product
production tonnes 626,400 755,500 911,500 821,300 979,300 1,081,300
Cash operating cost US$197 US$200 US$190 US$166 US$136 US$132
per tonne of finished
product
Net debt
2012 2013 2014 2015 2016 2017
US$m US$m US$m US$m US$m US$m
Bank loans 324.4 355.2 337.7 341.9 102.6 102.9
Loan amendment fees and
expenses - 6.7 12.4 25.9 - -
Gross debt 324.4 361.9 350.1 367.8 102.6 102.9
Cash and cash equivalents (46.1) (67.5) (21.8) (14.4) (57.8) (68.8)
Net debt 278.3 294.4 328.3 353.4 44.8 34.1
This announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the information
contained therein.
Source: Kenmare Resources via Globenewswire
http://www.kenmareresources.com/
(END) Dow Jones Newswires
March 14, 2018 03:00 ET (07:00 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
1 Year Kenmare Resources Chart |
1 Month Kenmare Resources Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
