Sherritt International (S-T) posted a profit in the second quarter, when lower nickel prices were partially offset by lower operating costs and higher cobalt prices.
The Toronto-based company earned $10.9 million (or 7 cents per share) during the 3-month period, compared with $13 million (14 cents per share) in the corresponding period last year. Revenue between the two periods slipped to $93.8 million from $105.4 million.
The company’s metals division consists chiefly of mining and processing facilities in Moa, Cuba, and refinery operations in Fort Saskatchewan, Alta.
During the second quarter, the metals division earned $9 million on revenue of $44.8 million, compared with year-ago figures of $14 million on $57.8 million.
Nickel prices decreased 32% between the corresponding quarters, to US$2.25 from US$3.31 per lb.
The Metals Bulletin average free market price for 99.8% cobalt was US$24.43 per lb. in the recent second quarter, an increase of 2% from a year ago.
The refinery set a total finished cobalt production record of 660 tonnes in the second quarter, surpassing the previous record of 598 tonnes, set in the first quarter of 1998. Total finished cobalt production for the quarter was 16% higher than in the similar period last year, whereas total finished nickel production of 6,773 tonnes in the second quarter was 9% more than a year ago.
Revenue from Sherritt’s oil and gas division was up 42% over the second quarter of 1997, when higher oil production offset the impact of declining world oil prices. However, the division generated an operating loss of $800,000, compared with a loss of $400,000 a year ago.
The company’s fertilizer business continued to increase sales in western Canada. Earnings during the 3-month period amounted to $7 million on revenue of $33.9 million, virtually unchanged from the second quarter of 1997.
As of June 30, the company had total assets of $1.4 billion. Cash and short-term investments of $490 million were unchanged from the first quarter of 1998.
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