Sherritt International Corporation Q3 2024 Earnings Report

Date: October 31, 2024
Ticker: S-TSX

Overview

Sherritt International Corporation, a leader in nickel and cobalt mining, reported its Q3 earnings on October 31, 2024, demonstrating strong operational performance despite the lowest cobalt prices since 2016 and a 12% decline in nickel prices.

Key Highlights

• Net Direct Cash Cost (NDCC): Decreased to US$5.16 per pound, a 30% year-over-year reduction.
• Liquidity: Increased by 28%, totaling $71 million.
• Production: Mixed sulphides and finished nickel production increased year-over-year; fertilizer sales up by 46%.
• Sales Challenges: Finished nickel and cobalt sales were affected by seasonal factors and logistical disruptions.
• Future Focus: Enhancements in the Phase 2 expansion of the Moa joint venture, with cost optimization efforts to deal with market conditions.

Financial Performance

• NDCC: US$5.16, achieved through operational improvements despite lower by-product prices.
• Revenue: $126.4 million, relatively stable compared to $128 million in Q3 2023, helped by higher nickel sales volumes.
• EBITDA: Adjusted EBITDA of $10.5 million, significantly improved year-over-year.
• Net Earnings: Improved to $1.8 million from continuing operations, despite adjusted net loss of $11.5 million excluding a non-cash gain.

Company Outlook

• Outlook remains cautious, particularly regarding Cobalt Swap and low commodity pricing management.
• Continued focus on maximizing cash flows and liquidity.
• The Moa joint venture's Phase 2 expansion is set to be commissioned by early 2024.

Market Challenges

Bearish Highlights

• Significant drops in cobalt and nickel prices.
• Sales constraints due to seasonal trends and logistical challenges, including a Canadian rail lockout.

Bullish Highlights

• Increased production of key outputs and cost-saving measures through workforce reductions, expected to save $17 million annually.

Conclusion

Sherritt International Corporation maintains its commitment to operational excellence and strategic cost management amidst market challenges. The company remains resilient as it prepares to report Q4 results in the New Year.

Note: This report was generated with AI support and reviewed by an editor.