Nickel producer
During the six months ended June 30, Sherritt earned $37.4 million (or 34 per share) on revenue of $260.9 million. Comparable figures for 2000 were $66.7 million in profits and $252.3 million in revenue.
Roughly half the revenue during the recent period ($129 million) came from fertilizer, nickel and cobalt sales. Production of nickel and cobalt metal was lower than in the first half of 2000, with 6,647 tonnes nickel and 693 tonnes cobalt shipped. Nickel and cobalt sulphides made up some of the difference, with 8,066 tonnes of concentrates going out the door.
During that period, Sherritt realized an average of US$2.93 per lb. for nickel, against an average London Metal Exchange spot price of US$3. For cobalt, Sherritt realized US$11.13 per lb. during a period when the spot price averaged US$10.47. Prices were significantly lower than in the first half of 2000, when the company received an average of US$4.27 for nickel and US$13.59 for cobalt.
The metals and fertilizer segment of the business made $10.5 million in operating profits during the first half.
The newly acquired Luscar coal assets generated $43.2 million in revenue between the May 12 closing of the sale and the end of the accounting period, and the division’s operating earnings were $2.6 million. Sherritt, in partnership with the Ontario Teachers’ Pension Plan, took over the Luscar Coal Income Fund with a bid of one common share of Sherritt, or $4, for each fund unit. Sherritt and the pension plan now each own half of the fund, which is the sole shareholder of Luscar Coal.
Sherritt’s revenue was $161.7 million in the three months ended June 30, up from $140.4 million in the second quarter of 2000. But earnings fell, to $15 million or 11 per share, from $31.9 million a year earlier.
At the half-year mark, Sherritt had $533.8 million in current assets, including $145.4 million in cash. Short-term liabilities were $338 million.
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