Sherritt International reports solid first quarter

Newly formed Sherritt International (TSE) posted strong earnings for the first quarter.

The company earned $8.6 million (or 12 cents per restricted voting share) over the period on revenue of $66.3 million.

The company was formed last November, when Sherritt Inc. spun off its overseas interests in nickel, cobalt, oil and gas, along with its engineering and metallurgical business and some Cuban investments. What remained of Sherritt Inc. — notably its nitrogen and phosphate fertilizer business — became known as Viridian (TSE) in April.

Operating earnings from Sherritt International’s metals business jumped 55% from the previous year’s first quarter, to $8.7 million. Revenue declined by 9% to $49.4 million as a result of low cobalt and nickel prices.

At the Moa Bay mine in Cuba, production in January amounted to 2,566 tonnes of contained nickel and cobalt. First-quarter production amounted to 6,823 tonnes, a substantial increase from 4,250 tonnes in 1995.

And at the refinery in Fort Saskatchewan, Alta., stable operations and higher metal concentrations contributed to record production of 2,316 tonnes of nickel and 506 tonnes of cobalt. These represent improvements of 12% and 27%, respectively, over first-quarter 1995 totals.

The company generated cash flow of $17.2 million during the period. Capital expenditures for the first quarter totalled $17.6 million, most of which was directed at the Moa Bay mine refurbishment program, expansion of the Fort Saskatchewan refinery and continued activity on Cuban oil prospects.