Sherritt International turns a corner in pivotal 2022

Nickel and cobalt producer Sherritt International (TSX: S) has reported strong financial results for 2022, as higher prices offset lower cobalt output.

The Toronto-headquartered company reported overnight Thursday full-year net earnings from continuing operations of $63.7 million, compared with a net loss from continuing operations of $13.4 million in 2021.

The headline adjusted net earnings from continuing operations amounted to $88.4 million in 2022, compared with $13.9 million in 2021.

The company’s net earnings came in at $63.5 million, compared with a net loss of $18.4 million in 2021.

Sherritt reported finished nickel production of 32,268 tonnes (100% basis), in line with guidance, representing a 3% increase year-over-year primarily due to increased refinery reliability. Finished cobalt output was 3,368 tonnes (100% basis) – within guidance and 4% lower than the prior year due to the higher nickel-to-cobalt ratio in the Moa (Cuba) mixed sulphide feed and lower availability of third-party feed.

President and CEO Leon Binedell said in a release 2022 was a pivotal year for Sherritt. “On the strength of higher nickel and fertilizer prices, we achieved strong operating and financial results while delivering on each of our 2022 strategic priorities to set the stage for continued success in the future.”

The company has embarked on a low capital intensity expansion program, significantly deleveraged its balance sheet, and critically finalized transformative payment agreements with its Cuban partners to recover $368 million of total outstanding receivables. Binedell added the company made strides in advancing its portfolio of proprietary technologies and had met its sustainability targets.

Sherritt said it has embarked on a multi-pronged growth strategy focused on expanding nickel and cobalt production by up to 20% from 2021 and extending the life of the mine at Moa beyond 2040. The company is also the largest independent energy producer in Cuba.

Shares in the company closed more than 3% lower on Thursday at 59¢, having touched 31¢ and 85¢ over the past 12 months. It has a market cap of $234.4 million.