Kenmare Resources plc (LON:KMR) Managing Director Michael Carvill caught up with DirectorsTalk for an exclusive interview to discuss safety milestones, a record year for production and shipments, strong products market, the significant amount of cash returned to shareholders and guidance for 2022.
Q1: It looks as if 2021 was a record year for Kenmare Resources for a number of reasons but first, can you just tell me about your recent safety milestones?
A1: This is something we’re particularly proud of. On the 6th of January, we passed one full calendar year without a lost time injury and for a project that’s as large as ours with so many people working on it and with such a large amount of machinery moving around, that’s quite an achievement.
Also at the end of the year, on the 31st of December, our 12 month lost time injury frequency rate had dropped to .03 and that’s, again, a huge record for our company and compares very favourably with all of our peers.
So, I’m looking forward to getting down to site early next month to congratulate the team for this great achievement.
Q2: Now, your announcement also mentions that 2021 was a record year for production and shipments?
A2: We produced 1,119,000 tonnes of our main product, which is ilmenite naturally occurring titanium mineral and that, again, is a huge record for us. It’s the first time that we’ve got substantially over a million tonnes and because our product market was very positive, we were able to ship and that material all fell into a very receptive market.
So, it was good production and the market was happy to receive.
Q3: I see that you benefited from strong product markets during the year, can you tell us more about that?
A3: When the tide’s coming in, it’s a good thing so we have had consistently increasing prices right through the every quarter of the year and we are that continuing into Q1 so we’re, we’re very pleased.
That has allowed us to increase our production by 50% and, as I just mentioned in the previous question, just to allow that new production to find positive happy homes with customers who are continually paying more for it.
So, it’s a very positive environment for us at the moment.
Q4: You returned a significant amount of cash to shareholders in 2021, is that important to the company?
A4: The investors and the shareholders own the company and they’ve invested money in the company with view of to getting returns and so therefore it’s our job to provide those returns to them.
This year we increased our payout ratio, our dividend policy from 20% to 25% and that was a step forward and we also, in a share buyback, repurchased 13.5% of the issue share capital, which again is another transfer of value back to our shareholders.
So in total, there was a shareholder return of nearly $100 million this year.
Q5: Now, Kenmare Resources has provided guidance for 2022, what are the key takeaways from that?
A5: The key takeaway is that we anticipate and intend to increase our production above the levels that we achieved in 2021 and all of the activities of the company and our plans and our agendas are based around that increase in production.
