Kenmare Resources (KMR) H2 2025 earnings summary

Executive summary

• 2025 was marked by volatile markets, weak ilmenite and zircon prices, lower production, and significant operational and financial challenges, including major impairment charges impacting profitability.

• Major capital investment in the WCPA project led to elevated net debt; the upgrade is now complete and operating at nameplate capacity.

• Dividend payments were paused to preserve liquidity and financial flexibility amid market weakness.

• The company focused on liquidity, cost control, and balance sheet strength, including a 15% workforce reduction and deferral of non-essential CapEx.

• Implementation Agreement renewal with the Mozambique government remains unresolved, creating fiscal uncertainty.

Financial highlights

• Revenue fell 20% year-over-year to $312m due to a 13% drop in sales volumes and lower average prices (ilmenite down 6%, zircon down 15%).

• EBITDA declined to $58 million from $157 million in 2024; net loss after tax was $24 million.

• CapEx totaled over $205 million, with $156 million for WCPA and $49 million sustaining; impairment charge of $301.3 million.

• Net debt ended at $158.8 million, with $49 million cash and $205 million total debt.

• Total cash operating costs were stable at $243 million, but unit costs rose 10–11% due to lower production.

Outlook and guidance

• 2026 CapEx guidance is $60 million, a 70% reduction from 2025, with WCP A capex to fall to ~$30 million and sustaining capex guided at ~$30 million.

• Operating costs expected to decrease by approximately 10% in 2026, with total cash operating costs expected to decrease to $215–225 million.

• Shipping guidance for 2026 is over 1.1 million tons, a >15% increase year-over-year, mainly from inventory drawdown.

• Production of finished products will be lower to minimize costs and accelerate stockpile reduction.

• Dividend resumption is a priority but contingent on market recovery and financial position.