Kenmare Resources Share Discussion Threads

[yellowstoneadvisory] 10/3/2022 16:26

KMR - FY results 23/3. Management present at 12.30,

Recent TS said 2021 was a record year. Hear how they achieved this and the prospects for 2022

Register:

[ukgeorge] 09/3/2022 09:27

Looks like you timed it well. I was also thinking of topping up mainly because the share price has consolidated for around a year and they should have been making good money over the year.

[spectoacc] 08/3/2022 11:50

Having seen what Nickel's done today, have bought more KMR in expectation of something similar happening to ilmenite, Ukraine being a big producer.

Could be barking up the wrong tree, but KMR's hardly expensive to begin with.

[robmcelf2] 05/3/2022 10:20

Thing I think may be a differentiator for Kenmare is their use of renewable energy at a time when fossil fuel costs are soaring. So in theory the minerals they produce will increase in value but KMR costs may not be rising at such a steep rate certainly on the energy front...

[km18] 21/2/2022 18:37

...from last year...

Company overview:Kenmare Resources is a mining company operating the Moma titanium Minerals mine in Mozambique. The mine began commercial production in 2009 and is a major supplier of mineral sand products to clients in more than 15 countries. The Moma mine’s products are key raw materials in products we see and touch every day like paints, plastics, and ceramic tiles. Growth is definitely organic, with no acquisitions, and high CapEx from purchases of Fixed Assets. Top priorities of the company are growth coming from the project the company already completed during the last 3 years and margin expansion on the back of these projects with cash operating costs per tonne expected to fall to the $125-135 region.
The company is supplying 7% of the global titanium feedstocks, which translates in a big exposure to a hit on demand which last year was balanced also by reduced supply and shot the prices in the sky. This year’s performance  2020’s performance was boosted in the end by the successful relocation of the Wet contractor Plant B to the Pilivili mine, where the company will be able to mine higher quality ore. Th benefit from this is not only high-quality material but also operational de-leveraging, as Kenmare could increase ilmenite tonnes by 35% compared to 2019, combined this with a fixed cost base and we should be looking at higher profit margins in the coming periods.
Continuous debt retirement in the last decade was balanced by stock issuance, which obviously brought the BV ps down significantly. Margins were very squeezed in the mid-2010s, but since then the company is profitable with healthy growth in revenues at 11.3% CAGR and positive outlook for the coming periods. The update from the interim is confirming our opinion so far, with H1 2021 EBITDA up 121% and profits after tax seeing a staggering 278% growth. Safety is not forgotten as the Kenmare reports lost time injury frequency rate of 0.14 per 200k hours, which is 2.5x less than the H1 2020 result. Moreover, the Mozambique dredging operation had record ore production for the quarter at 11m tonnes for Q2. Growth is everywhere on the update, Heavy Mineral concentrate is  seeing a 43% increase from H1 20 at 798,500 tonnes and total shipments are 594,100 tonnes (up y 44%). Outlook is excellent with higher prices agreed and strong book in ilmenite market and zircon market  improvements in Q2 analyst consensus is expecting nearly double the cash profits from last year’s $77m.

Short analysis:

Cash went down by 66% due to big repayments of debt and additions to PPE
Net debt is positive as cash is not covering debt levels
CA/CL =  3.79
Cash ratio = 1.2
Interest coverage (yearly 2020) = 3.30
P/S TTM = 2.62, which is average for the sector
BV ps = 821 for 2020
Operating profit for the interim was $58.76m, 3.0x the H1 2020
Gross profit Margin = 43.71%, compared to 29% for H1 ‘20...

...from WealthOracleAM

[robmcelf2] 19/2/2022 16:41

Nice write up. With a mine life of 100+ years, a big discount to NAV and a growing divi, surely KMR has plenty of room for share price appreciation?

[spectoacc] 18/2/2022 16:15

Two page tip write-up in the IC today.

[ukgeorge] 30/1/2022 18:44

Looks like a buying opportunity, unless Russia kicks off with Ukraine and China with Taiwan.

[ukgeorge] 30/1/2022 18:39

Hannam & Partners



Released a new broker note on the 24th Jan, 650p target

Model update – price strength boosts FY21-23E estimates
We have revised our estimates for the Dec’21 buyback, Q4’21 trading update,
higher near-term realised prices in line with recent market trends, and higher
costs in FY22-23E as guided by KMR (see table on p5). For FY21E, our EBITDA
and EPS increase by 9% and 16%, respectively, to US$208m and US$1.26/share
(GBp 92/sh). For FY22E we increase our EBITDA and FCF by 28% and 27%,
respectively, to US$240m and US$172m, despite factoring in lower shipment
volumes due to an expected increase in finished product inventories. Our FY23E
EBITDA and FCF increase by 37% and 41% to US$197m and US$161m,
respectively, on higher price assumptions, partially offset by higher costs. The
buyback further boosts our per-share estimates, with a 64%/90% increase in
FY22/23E EPS to US$1.72/1.32/sh (GBp 127/97/sh).

[catsick] 13/1/2022 08:01

Seems pretty good to have over the last year engaged in major improvement capex, paid divs and bought back 13% of outstanding dhares and end up with the same debt

[ukgeorge] 13/1/2022 07:27

Great results :)

[cgequityinvest] 05/1/2022 12:57

Well not often you see a share with a forecast increase in eps of 647% for the last 12 months - (courtesy of Sharepad).

EPs increases from 15c year ending 12/20 to forecast 112c for year just ended Dec 21!

Forecast for current year to Dec 22 is more modest - 119cents.

Forecast yield of 4.6% is not much lower than forecast p/e of 5.6.

[ukgeorge] 05/1/2022 11:25

What a great run wishing I hadn't sold any :) this is looking great

[spectoacc] 05/1/2022 10:59

Edited - been holding too long :))

[spectoacc] 05/1/2022 09:17

Quietly gone towards breakout hasn't it - maybe the 417p tender wasn't such a bad idea after all. Still amazed they found takers.

[ukgeorge] 05/1/2022 09:14

So how far does this run? I think it will likely push above £6 before any meaningful retracements

[cgequityinvest] 03/1/2022 17:14

No direct access to pricing but I don't think this feedback (from a couple of weeks ago) from CEO has been covered on this board previously https://directorstalk.net/kenmare-resources-what%c2%b4s-driving-the-strong-share-price-interviewHope link works if not just search kenmare directors talk.

[rjmahan] 02/1/2022 20:51

Has anyone got any good sources for recent Ilmenite pricing?

[ukgeorge] 02/1/2022 12:19

Sounds like it should be a good year ahead :)

[pdosullivan] 11/12/2021 19:08

Bloomberg consensus has KMR doing GBP£100m of net income next year. Knocking a few million off for financing costs associated with the tender and dividing by the new ~95m share count gives around a quid of basic EPS and puts KMR on an unadjusted forward PE of 4.25x

[spectoacc] 10/12/2021 07:59

Tender got away then, and comfortably so - surprised.