Berenberg trims target price on Kenmare Resources

(Sharecast News) - Analysts at Berenberg trimmed their target price on Kenmare Resources from 220p to 210p after the miner's firsthalf numbers came in softer than expected, largely due to weaker ilmenite market conditions.

Berenberg said H1 revenues fell to $149m, below its $155m estimate, with softer ilmenite pricing being the main drag, while cost of sales rose to $173m against its $165m forecast, reflecting inventory movements and higher depreciation. Adjusted underlying earnings of $4m also missed Berenberg's $11m estimate. Kenmare also posted an interim operating loss of $26m.

Cash costs of $255 per tonne, however, were lower than expected following accounting adjustments for its new zirconiumtitanium product and capex of $30m came in below forecasts, but cash from operations of $13m was weaker than anticipated, leaving net debt at $176m at periodend.

As expected, Kenmare paid no dividend and has paused future payouts until market conditions improve, which will likely not be anytime before H127. Guidance for FY26 shipments, production, costs and capex was maintained.

Berenberg said it expects a stronger second half, helped by improved performance at Wet Concentrator Plants A and B and the planned Q4 commissioning of the second Selective Mining Operation. It added that ongoing negotiations with Mozambique over the extension of the Moma Implementation Agreement remained a key overhang on the shares until resolved.

Following model updates, the German bank reiterated its 'hold' rating on the stock, noting the shares trade at 0.55x net asset value and 7.7x 2026E underlying earnings.

Reporting by Iain Gilbert at Sharecast.com