Sherritt International (TSX:S, Stock Forum), a Toronto-based natural resource firm operating in Canada and Cuba, reported financial results from its first quarter of fiscal 2014.
According to the news release, the company filed a Q1 2014 net loss of $48.2 million or $0.16 per share versus a profit of $23.1 million or $0.08 per share reported a year ago.
The drop in earnings was attributed to the impact of higher financing expenses related to foreign exchange losses resulting from a weakened Canadian dollar and depreciation, depletion and amortization being recognized at Ambatovy for the first time following the commencement of commercial production in January of this year.
The release went on to note that despite lower nickel prices, averaging US$6.64 per pound during the quarter, adjusted EBITDA stayed healthy at $54.9 million or $0.18 per share with adjusted operating cash flow for the quarter totaling $0.26 per share compared to $0.18 per share announced in Q1 2013.
Company president and CEO, David Pathe, commented, “Momentum in our business increased during the quarter due to a number of factors.”
He went on to explain, “We achieved an important milestone at Ambatovy in meeting the requirements for commercial production. Finished nickel sales volumes in our Metals business increased by 64%, largely due to the first commercial sales at Ambatovy, further enhancing Sherritt's position to benefit from the strengthening nickel price.”
The he added, “We also closed the Coal transaction and made significant strides in our ongoing efforts to reduce costs. The market has begun to recognize the progress we have made in our business and the improvements in our operating environment.”
And finally concluded, “Our near-term focus continues to be paying down debt, meeting our cost reduction targets, and moving Ambatovy forward.”
Sherritt was in the news recently when the company responded to dissident shareholder, George Armoyan's latest communication yesterday.
Currently there are 297.3m outstanding shares with a market cap of $1.4 billion.