Kenmare shares fall sharply despite dividend payout news
IRISH-owned titanium miner Kenmare Resources has announced its first dividend will pay at least 20pc of annual after-tax profits, under a new policy outlined to shareholders.
In a wide-ranging update to the market, the company also said an investment programme - including the expansion of a wet concentrator plant, at the massive Moma mine in Mozambique - had been completed successfully and under budget.
Shares fell yesterday, down more than 4.67pc in afternoon trade.
Payments under the new structure will start with an interim dividend paid in the second half of 2019, based on financial results for the first-half of the same year. The company said it expected to pay modest dividends during the next two years.
Kenmare's most recent financial result show it made after-tax profits of $26.4m (€22.8m) in the first half of 2018. The Dublin-listed company's main operations are at the Moma mine in Mozambique.
"As part of Kenmare's objective to create and deliver shareholder value, the company is pleased to announce its dividend policy," Kenmare said. "The dividend policy is to return a minimum of 20pc of profit after tax. This policy is subject to prevailing product market conditions and ensuring that the company retains a prudent level of cash to fund debt and capital requirements."
To fund that new programme, Kenmare said it intended to eliminate historic losses carried on its balance sheet as well as undertake a group rationalisation.
Debt net of cash has already been reduced to around €10m and Kenmare said lenders have approved the proposed measures.
Elimination of historic losses will require approval from shareholders and the Irish High Court.
An extraordinary general meeting to sanction the plan will be held later this year, with all of the steps to approve the programme expected to be completed early next year.