Mozambique-focused Kenmare Resources has seen its profit fall by over 40 percent in the first half of this year on the back of lower production levels.

The Dublin-listed group reported profit after tax of $12.7m for the six months to June 30, down from $21.9m the corresponding period last year, according to interim results.

Revenue for the period was $116.8m, a 5percent decrease on the first half of 2019, while earnings before interest, taxation, depreciation, and amortisation were down 13percent to $37.2m.

Kenmare operates the Moma Titanium Minerals Mine on the north east coast of Mozambique which produces titanium minerals, used in the production of paints, paper and plastics, and zircon which is used in ceramics.

During the six-month period Heavy Mineral Concentrate (HMC) production of 558,400 tonnes decreased 12percent compared to the same period last year, due primarily to anticipated lower ore grades.

Total finished product production of 410,600 tonnes was down 19percent mainly due to reduced HMC supply as a result of lower production.

Total shipments were down 14percent, however shipment volumes are expected to be stronger in the second half of the year, the company said.

Michael Carvill, managing director of Kenmare, said: “Our performance during the first half of 2020 demonstrated Kenmare’s resilience and agility, effectively managing many challenges posed by the Covid-19 pandemic to continue to produce and ship our products safely.

Although production was weaker in H1 2020 than in the corresponding period last year, our business remained profitable and I am pleased to announce an interim dividend of US 2.31 cent per share.”

The company said the market for ilmenite remained “strong” in the first half of the year.

This led to a fifth consecutive quarter of higher average prices received in quarter two 2020.

“Demand for Kenmare’s ilmenite products continues to be stable and Kenmare has secured off take agreements for the majority of its ilmenite production in H2 2020,” the company said.

However, it warned that the impact of Covid-19 are uncertain for the ilmenite market.

Downstream demand for titanium pigment has been negatively impacted by lower global economic activity as a result of the pandemic, it said.

Kenmare expects total ilmenite production for the year to be in the range of 700,000-800,000 tonnes, down slightly on its previous guidance of 800,000-900,000 tonnes.

Kenmare expects shipment volumes to be higher than updated production volumes this year.

Total capital expenditure in 2020 is expected to be $142m.

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