NEW YORK Horsehead Holding Corp. recorded a third-quarter net loss of more than $9 million on lower London Metal Exchange zinc prices, but has expanded plans for its new North Carolina zinc smelter.
The Pittsburgh-based company posted a $9.1-million loss for the three months ended Sept. 30 in contrast to a $23.1-million profit in the corresponding quarter of 2011. Its net sales fell to $100.4 million, down 31 percent from $145.8 million in the third quarter of 2011.
The LME zinc price was 15 percent lower in the quarter vs. the same quarter last year, reducing earnings an estimated $0.12 per share, according to the company.
Still, Horsehead president and chief executive officer Jim Hensler said in an earnings call that he was pleased with the companys operating performance in light of the lower LME prices.
"Against the same quarter last year, our (electric-arc furnace) dust recycling facilities processed 17 percent more dust despite lower steel-industry output, our zinc smelter produced 7 percent more zinc and our Inmetco operations produced 6 percent more nickel remelt alloy," he said.
Hensler also said the company has "decided to expand the scope" of its new zinc smelter in Rutherford County, N.C., "to provide for lower long-term operating costs by upgrading the materials of construction, enhancing the recovery of by-products such as lead and silver, and upgrading effluent and stormwater management."
The project expansion is expected to cost an additional $40 million. The company previously has said the budget for the project was $375 million (amm.com, June 29).
Hensler said that the companys cash-on-hand and financing arrangements "should provide ample liquidity to complete the project at the higher projected spending level." He added that the project remains on schedule for start-up in the second half of 2013.
The company is also moving forward with a capacity expansion at its facility in Brampton, Ontario (amm.com, July 31), in anticipation of the idling of the zinc oxide refinery at its Monaca, Pa., plant. Phase I of the project, which includes expanding four existing furnaces, is expected to be fully commissioned by the end of the first quarter of 2013, while Phase II, which includes the addition of a new larger furnace and a building expansion, is expected to be completed by the end of the third quarter of 2013.