NEW YORK Sherritt International Corp. blamed poorer
results last year on lower nickel prices caused by global
production exceeding demand.
The Toronto-based company posted 2012 net income of Canadian
$33.2 million ($32.45 million), down 83.2 percent from C$197.3
million the previous year, on revenue that fell 6.7 percent to
C$1.84 billion ($1.8 billion).
Sherritt fell into the red in the fourth quarter, posting a net
loss of C$17.3 million ($16.91 million) in contrast to net
income of C$28.1 million in the same period a year earlier, on
a 12.8-percent decline in revenue to C$467.9 million ($457.38
The reduction in net earnings was attributable to lower
revenue (resulting from lower nickel and cobalt reference
pricing and lower export thermal coal sales volumes), higher
operating costs in metals and coal (business divisions), higher
depreciation in coal resulting from a change in environmental
rehabilitation obligations, and an increase in the net finance
expense resulting from the redemption premium, the
Sherritt said that last years average nickel price was
$2.41 per pound lower than in 2011 and fourth-quarter nickel
prices were 60 cents per pound lower than a year earlier as
global production continued to outpace demand.
In more positive news, finished nickel production climbed to
39,958 tonnes in 2012, up 16 percent from 2011, with
fourth-quarter output of 12,281 tonnes 34 percent higher than a
The company expects finished nickel production to total
approximately 78,000 tonnes in 2013 as its joint-venture
Ambatovy project in Madagascar continues its ramp-up and
achieves commercial production during the year.
Sherritt president and chief executive officer David Pathe said
in a statement that 2012 was a transformational year for
Sherritt, marked by Ambatovys successful transition
from a project to an operation.
However, the addition of finished metal production from
Ambatovy during 2012 was partially offset by lower finished
metal production at its joint-venture Moa project in Cuba, due
mainly to reduced mining equipment availability and lower
availability of third-party nickel feed, the company said.