Although it managed to secure new feed for its nickel refinery in Fort Saskatchewan, Alta., Sherritt Gordon (TSE) has been hit hard by falling base metal prices. The Toronto-based company’s 1989 net earnings dropped significantly to $32.2 million or $1.19 per share from $56.5 million or $2.04 per share at the end of 1988.
As a result of the recent nickel slide, Sherritt Gordon reported a fourth-quarter net loss of $3.2 million or 13 cents per share, compared with a profit of $8.8 million or 29 cents per share at the same period last year.
Sherritt’s fourth-quarter revenues decreased to $118.6 million from $135.7 million largely because of a steady decline in the price of nickel which has fallen to US$2.70 per lb. from US$7.23 in December, 1988.
However, the company’s annual revenues remained steady at $545.8 million, compared with $545.4 million in 1988.
Nickel price realizations are the biggest factor affecting Sherritt Gordon’s metals division which in turn generates 57% of the company’s total revenues.
However, operating earnings of $20.9 million in the company’s fertilizer division were marginally higher than the $17.9 million reported in 1988.
In addition to fertilizer production, marketing and metal refining, Sherritt Gordon also produces chemicals and sells specialty metal products.
Sherritt said its financial results were adversely affected by a strong Canadian dollar and the cost of moving its front offices from Toronto to Fort Saskatchewan, about 20 miles northeast of Edmonton, Alta.
The company also announced plans last year to build a $140-million research laboratory next to its coinage and metal processing facilities there.
According to Sherritt, earnings per common share for 1989 were calculated after deducting dividends on preferred shares of $2.3 million. During 1989, the average number of shares outstanding increased to 25 million from 23.2 million in 1988. Sherritt Gordon (TSE) Year ended Dec. 3119891988 Revenue (000s)$545,899$545,409 Net earnings (000s)32,18156,491
(per share)1.192.27003
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