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“During the quarter, our nickel, oil and power operations all generated free cash flow(1), allowing us to repay another
Q1 2017 HIGHLIGHTS
- Sherritt repaid
$20.5 million of recourse borrowings in the first quarter of 2017, ending the quarter with cash, cash equivalents and short-term investments of$300.7 million , down$8.9 million from their level at year end 2016. The first quarter of 2017 benefited from a higher level of Cuban energy payments received (US$37.6 million ) compared to payments ofUS$18.3 million received in the fourth quarter of 2016.
- First quarter 2017 Net Direct Cash Costs (NDCC) of
US$3.25 /lb at the Moa JV andUS$3.93 /lb at the Ambatovy Joint Venture are both improvements over their prior year comparables ofUS$3.34 /lb andUS$4.41 /lb respectively. Moa’s first quarter NDCC is a significant improvement from fourth quarter 2016 NDCC ofUS$3.80 /lb, while Ambatovy’s fourth quarter 2016 NDCC represented Ambatovy’s best cost profile since inception.
- Average reference prices in the first quarter of 2017 relative to the first quarter of 2016 were up 21% in nickel, 85% in cobalt and 116% in Gulf Coast Fuel Oil 6, the benchmark price for Sherritt’s Cuban oil production. Comparing the commodity price performance to the fourth quarter 2016, the nickel price fell by 5%, while cobalt prices continued to increase (up 47% from the fourth quarter 2016 average) and Gulf Coast Fuel Oil 6 increased by 11%.
- The Hurricane Matthew impacts that limited mixed sulphides production in the fourth quarter last year had a continuing effect into the first quarter this year as the reduced mixed sulphide shipments out of Moa to the
Fort Saskatchewan refinery landed and were refined during the first quarter. Moa nickel production was down 9% over first quarter 2016 production, but consistent with fourth quarter 2016 levels.
- Ambatovy nickel production was down 14% compared to first quarter 2016, and down 25% from fourth quarter 2016, reflecting the impact of a power trip in late January as well as limited acid production in February caused by unplanned repairs required on a molten sulphur tank. Equipment reliability related to acid production remains a risk in the second quarter, due to ongoing repairs and maintenance. In early March,
Madagascar was also hit by Cyclone Enawo, the third most damaging cyclone on record in the country. Ambatovy was able to continue operating through the cyclone event, although production rates were reduced due to the impacts of extreme wind and rain on open pit mining operations and bulk commodity handling in the process plant.Staffing was also minimized to allow employees to be with their families during the cyclone event.
- The first results from Block 10 drilling were announced by press release dated
March 17, 2017 . The well targeted the previously discovered Lower Veloz formation in the Bay ofCardenas , Province ofMatanzas ,Cuba . The lower leg of the well was abandoned due to geotechnical instability in the wellbore. By utilizing part of the first well, the capital cost to drill the second well, again targeting the Lower Veloz, will be significantly less, estimated atUS$8 million . Any future capital in Block 10 will be contingent upon success in this well, and expected capital spending for the year will be revised when the well has been completed and results disclosed.
- The net loss of
$72.6 million for the quarter endedMarch 31, 2017 compares to a net loss of$47.8 million in the first quarter of 2016, which benefited from a significant unrealized foreign exchange gain of$76 million in financing expense, compared to an unrealized$7.3 million gain this quarter.
| All amounts are Canadian dollars unless otherwise indicated. |
| (1) For additional information see the Non-GAAP measures section of this press release. |
| Q1 2017 FINANCIAL HIGHLIGHTS | |||||||||||
| $ millions, except as otherwise noted, for the three months ended March 31 | 2017 | 2016 | Change | ||||||||
| Revenue | $ | 72.4 | $ | 58.4 | 24 | % | |||||
| Combined Revenue(1) | 228.0 | 191.3 | 19 | % | |||||||
| Net (loss) earnings for the period | (72.6 | ) | (47.8 | ) | (52 | %) | |||||
| Adjusted EBITDA(1) | 37.2 | (9.1 | ) | 509 | % | ||||||
| Cash provided (used) by continuing operations | 16.6 | (9.7 | ) | 271 | % | ||||||
| Combined adjusted operating cash flow (1) | 20.5 | (22.2 | ) | 192 | % | ||||||
| Combined free cash flow(1) | 10.0 | (31.4 | ) | 132 | % | ||||||
| Net (loss) earnings from continuing operations per share | (0.25 | ) | (0.16 | ) | (56 | %) | |||||
| (1) For additional information, see the Non-GAAP measures section of this release. |
| 2017 | 2016 | ||||||||
| $ millions, except as otherwise noted, as at | March 31 | December 31 | Change | ||||||
| Cash, cash equivalents and short term investments | $ | 300.7 | $ | 309.6 | (3 | %) | |||
| Non-recourse loans and borrowings | 1,356.8 | 1,367.5 | (1 | %) | |||||
| Other loans and borrowings | 840.2 | 860.7 | (2 | %) | |||||
In the first quarter of 2017, operating cash flow was generated by the Oil and Gas and Metals operations in equal proportion (
During the quarter,
The
Adjusted earnings (loss) from continuing operations(1)
| 2017 | 2016 | ||||||||||||
| For the three months ended March 31 | $ millions | $/share | $ millions | $/share | |||||||||
| Net loss from continuing operations | (72.6 | ) | (0.25 | ) | (47.8 | ) | (0.16 | ) | |||||
| Adjusting items, net of tax: | |||||||||||||
| Unrealized foreign exchange (gain) loss | (7.3 | ) | (0.02 | ) | (76.0 | ) | (0.26 | ) | |||||
| Other | (2.8 | ) | (0.01 | ) | (3.1 | ) | (0.01 | ) | |||||
| Adjusted net loss from continuing operations | (82.7 | ) | (0.28 | ) | (126.9 | ) | (0.43 | ) | |||||
| (1) For additional information, see the Non-GAAP measures section of this release. |
The net loss from continuing operations in the first quarter of 2017 was
REVIEW OF OPERATIONS
METALS
| $ millions, except as otherwise noted, | ||||||||||||||||||||||||||||||||
| for the three months ended March 31 | 2017 | 2016 | ||||||||||||||||||||||||||||||
| Moa JV and | Ambatovy | Moa JV and | Ambatovy | |||||||||||||||||||||||||||||
| Fort Site(1) | JV | Fort Site(1) | JV | |||||||||||||||||||||||||||||
| (50%) | (40%) |
Other (2) |
Total | (50%) | (40%) | Other(2) | Total | Change | ||||||||||||||||||||||||
| FINANCIAL HIGHLIGHTS | ||||||||||||||||||||||||||||||||
| Revenue | $ | 90.4 | $ | 74.8 | $ | 14.3 | $ | 179.5 | $ | 76.7 | $ | 65.1 | $ | 11.2 | $ | 153.0 | 17 | % | ||||||||||||||
| (Loss) earnings from operations | 2.0 | (29.0 | ) | 0.3 | (26.7 | ) | (11.3 | ) | (49.9 | ) | 0.3 | (60.9 | ) | 56 | % | |||||||||||||||||
| Adjusted EBITDA(3) | 12.8 | 8.2 | 0.3 | 21.3 | (0.2 | ) | (12.8 | ) | 0.3 | (12.7 | ) | 268 | % | |||||||||||||||||||
| Cash provided (used) by operations | 14.8 | (2.3 | ) | 1.6 | 14.1 | (3.0 | ) | (5.5 | ) | 4.2 | (4.3 | ) | 428 | % | ||||||||||||||||||
| Free cash flow(3) | 12.6 | (6.3 | ) | 1.6 | 7.9 | (10.6 | ) | (5.5 | ) | 4.2 | (11.9 | ) | 166 | % | ||||||||||||||||||
| PRODUCTION VOLUMES (tonnes) | ||||||||||||||||||||||||||||||||
| Mixed Sulphides | 4,282 | 4,317 | – | 8,599 | 4,321 | 4,571 | – | 8,892 | (3 | %) | ||||||||||||||||||||||
| Finished Nickel | 3,840 | 3,817 | – | 7,657 | 4,242 | 4,442 | – | 8,684 | (12 | %) | ||||||||||||||||||||||
| Finished Cobalt | 436 | 323 | – | 759 | 499 | 365 | – | 864 | (12 | %) | ||||||||||||||||||||||
| Fertilizer | 58,868 | 11,796 | – | 70,664 | 70,907 | 14,355 | – | 85,262 | (17 | %) | ||||||||||||||||||||||
| NICKEL RECOVERY (%) | 85 | % | 85 | % | 88 | % | 87 | % | ||||||||||||||||||||||||
| SALES VOLUMES (tonnes) | ||||||||||||||||||||||||||||||||
| Finished Nickel | 3,862 | 3,810 | – | 7,672 | 4,141 | 4,491 | – | 8,632 | (11 | %) | ||||||||||||||||||||||
| Finished Cobalt | 421 | 354 | – | 775 | 468 | 332 | – | 800 | (3 | %) | ||||||||||||||||||||||
| Fertilizer | 37,454 | 12,447 | – | 49,901 | 31,713 | 14,107 | – | 45,820 | 9 | % | ||||||||||||||||||||||
| AVERAGE EXCHANGE RATE (CAD/USD) | 1.324 | 1.373 | (4 | %) | ||||||||||||||||||||||||||||
| AVERAGE REFERENCE PRICES (US$ per pound)(3) | ||||||||||||||||||||||||||||||||
| Nickel | $ | 4.66 | $ | 3.86 | 21 | % | ||||||||||||||||||||||||||
| Cobalt | 19.80 | 10.70 | 85 | % | ||||||||||||||||||||||||||||
|
AVERAGE-REALIZED PRICES (3) |
||||||||||||||||||||||||||||||||
| Nickel ($ per pound) | $ | 6.19 | $ | 6.15 | $ | 6.17 | $ | 5.17 | $ | 5.15 | $ | 5.16 | 20 | % | ||||||||||||||||||
| Cobalt ($ per pound) | 24.19 | 26.75 | 25.38 | 13.84 | 15.39 | 14.52 | 75 | % | ||||||||||||||||||||||||
| Fertilizer ($ per tonne) | 343 | 164 | 297 | 391 | 186 | 327 | (9 | %) | ||||||||||||||||||||||||
| UNIT OPERATING COSTS (US$ per pound)(3) | ||||||||||||||||||||||||||||||||
| Nickel – net direct cash cost | $ | 3.25 | $ | 3.93 | 3.59 | $ | 3.34 | $ | 4.41 | $ | 3.90 | (8 | %) | |||||||||||||||||||
|
SPENDING ON CAPITAL (4) |
||||||||||||||||||||||||||||||||
| Sustaining | $ | 2.1 | $ | 8.4 | $ | – | $ | 10.5 | $ | 3.8 | $ | 1.7 | $ | – | $ | 5.5 | 91 | % | ||||||||||||||
| Expansion | – | – | – | – | 4.0 | – | – | 4.0 | (100 | %) | ||||||||||||||||||||||
| $ | 2.1 | $ | 8.4 | $ | – | $ | 10.5 | $ | 7.8 | $ | 1.7 | $ | – | $ | 9.5 | (25 | %) | |||||||||||||||
| (1) | Includes results for certain 100% owned assets at Fort Saskatchewan plant. | |
| (2) | Includes results for Sherritt’s marketing organizations for certain Ambatovy and Moa Joint Venture sales. | |
| (3) | For additional information, see the Non-GAAP measures section of this release. | |
| (4) | Spending on capital includes accruals. | |
METAL MARKETS
Nickel
The nickel average reference price for the quarter is up by 21% compared to the same period last year, from
Although the average price has been relatively flat since the fourth quarter of last year, prices have varied significantly through the three months. Nickel prices hit a low of
Fundamental long-term demand remains strong for high quality nickel with a positive trend in the aerospace and the electric vehicle sectors but the supply/demand short term balance is difficult to predict due to the high level of political uncertainties around
Cobalt
Cobalt prices have increased dramatically in Q1 2017; the cobalt reference price is up by 66% since the start of the year with an average reference price at
Several factors support this trend, including steady demand from the aerospace segment, strong projections for future cobalt consumption in batteries and increased interest from financial investors, who have entered the market for physical material as they are bullish longer term. In addition to this strong demand, supply issues should lead to a deficit in 2017 and contribute to the current price rally with quality issues at one of the high grade producers and growing pressure from consumers to ensure cobalt supplies from the DRC are not in contravention of any human rights laws. For instance, after the 2016 publication of several reports on child labour in the country,
The Moa JV finished nickel production of 3,840 tonnes (50% basis) in the first quarter is 9% lower than its level last year and up 2% from fourth quarter 2016 production. The discussion in the fourth quarter 2016 MD&A concerning impacts from Hurricane Matthew and the subsequent bridge collapse carries over into the first quarter this year. Lower mixed sulphides production in the fourth quarter of 2016 (3,674 tonnes) was shipped to the Fort Site for refining, with all shipments after the first week in December landing at the Fort Site in the first quarter this year. Mixed sulphide production has recovered to 4,282 tonnes in the first quarter, which is consistent with plan, and is expected to trend higher as the year progresses, and new mining equipment arrives. Similar to the fourth quarter 2016 pattern, the
Revenue in the quarter is up 18% from its comparable period last year, mainly reflecting the change in cobalt pricing, but is flat from fourth quarter 2016 revenue despite the increased cobalt price. This is mainly due to cobalt sales volumes down by 14% compared to fourth quarter 2016 levels where timing of shipments resulted in 105 tonnes of sales higher than production in the fourth quarter 2016. Fertilizer sales volumes were up 18% compared to first quarter 2016 levels in anticipation of a stronger spring season, but fertilizer prices are lower than their year-ago levels, although they have increased over the last two consecutive quarters. The stronger Canadian dollar in the first quarter of 2017 compared to 2016 also has a negative impact on revenue, as the exchange rate has strengthened by approximately
The NDCC of
Cash provided by operations of
Capital spending of
The annual planned refinery shutdown is scheduled to last for one week in the second quarter, at which time planned maintenance will be carried out.
Ambatovy Joint Venture (40% interest)(1)
Nickel production was 14% lower than first quarter 2016, and 25% lower than fourth quarter 2016, reflecting the impact of a power trip in late January as well as limited acid production in February caused by unplanned repairs required on a molten sulphur tank. In early March,
Despite this decrease in production, revenue is up by 15% on a year-over-year basis, as the lower production was more than offset by the increase in realized prices with a 19% increase in nickel average realized prices and a 74% increase in cobalt average realized prices compared to the same period in the prior year. The increases on a U.S. dollar basis are more significant, but the average exchange rate in the first quarter of 2017 is approximately
The NDCC of
Capital spending was as expected, with 2017 estimated capital spending all relating to sustaining capital required for mining and production equipment, including the purchase of articulated dump trucks.
Sherritt has not funded any cash calls since achieving financial completion, with total post-completion funding provided by
By agreement amongst the partners, Sherritt is not considered to be a defaulting shareholder under the Shareholders Agreement for amounts not funded through
| (1) | 70% of Sherritt’s distributable cash flow from Ambatovy (after opex, capex and project debt service) goes to Partner Loan repayment, leaving Sherritt with 30%; 30% of Sherritt’s 40% ownership = 12%. | |
OIL AND GAS
| $ millions, except as otherwise noted, for the three months ended March 31 | 2017 | 2016 | Change | ||||||||
| FINANCIAL HIGHLIGHTS | |||||||||||
| Revenue | $ | 35.3 | $ | 22.4 | 58 | % | |||||
| Earnings (loss) from operations | 11.0 | (8.7 | ) | 226 | % | ||||||
| Adjusted EBITDA(1) | 19.6 | 4.0 | 390 | % | |||||||
| Cash provided by operations | 14.0 | 2.6 | 438 | % | |||||||
| Free cash flow(1) | 10.3 | (2.4 | ) | 529 | % | ||||||
| PRODUCTION AND SALES (boepd) | |||||||||||
| Gross working-interest (GWI) – Cuba | 15,213 | 16,449 | (8 | %) | |||||||
| Total net working-interest (NWI) | 8,889 | 10,504 | (15 | %) | |||||||
| AVERAGE EXCHANGE RATE (CAD/USD) | 1.324 | 1.373 | (4 | %) | |||||||
| AVERAGE REFERENCE PRICE (US$ per barrel) | |||||||||||
| West Texas Intermediate (WTI) | $ | 51.62 | $ | 33.40 | 55 | % | |||||
| Gulf Coast Fuel Oil No. 6 | 45.63 | 21.13 | 116 | % | |||||||
| Brent | 53.33 | 33.64 | 59 | % | |||||||
|
AVERAGE-REALIZED PRICE (1) (NWI) |
|||||||||||
| Cuba ($ per barrel) | 43.62 | $ | 21.80 | 100 | % | ||||||
|
UNIT OPERATING COSTS (1) (GWI) |
|||||||||||
| Cuba ($ per barrel) | 8.66 | $ | 9.53 | (9 | %) | ||||||
| SPENDING ON CAPITAL(2) | |||||||||||
| Development, facilities and other | $ | (0.8 | ) | $ | 4.1 | (120 | %) | ||||
| Exploration | 3.8 | 0.6 | 533 | % | |||||||
| $ | 3.0 | $ | 4.7 | (36 | %) | ||||||
| (1) | For additional information, see the Non-GAAP measures section of this release. | |
| (2) | Spending on capital includes accruals. | |
Revenue in the first quarter of 2017 was up 58% from its comparable quarter last year, with Gulf Coast Fuel Oil 6 (GCF6) prices averaging
Cost-recovery oil production in
Despite the decrease in production, the unit operating costs are down by 9% on a year-over-year basis, reflecting lower labour and treatment and transportation costs.
The results from the first well in Block 10 were announced by press release during the first quarter, as described in the “Highlights” earlier. The well targeted the previously discovered Lower Veloz formation, but the lower section of the well was abandoned due to geotechnical instability in the wellbore. The capital cost associated with drilling the well was approximately
Capital spending is down 36% in this quarter compared to the first quarter of 2016 and reflects a delay in seismic survey activity on Block 8A, which was budgeted to start in January and is now scheduled to commence in October.
POWER
| $ millions (33 ⅓% basis), except as otherwise noted, for the three months ended March 31 | 2017 | 2016 | Change | |||||||
| FINANCIAL HIGHLIGHTS | ||||||||||
| Revenue | $ | 13.4 | $ | 15.6 | (14 | %) | ||||
| Earnings (loss) from operations | 2.8 | (0.2 | ) | 1,500 | % | |||||
| Adjusted EBITDA(1) | 9.2 | 8.7 | 6 | % | ||||||
| Cash provided by operations | 12.8 | 0.9 | 1,322 | % | ||||||
| Free cash flow(1) | 12.0 | 0.8 | 1,400 | % | ||||||
| PRODUCTION AND SALES | ||||||||||
| Electricity (GWh) | 217 | 217 | – | |||||||
|
AVERAGE-REALIZED PRICE (1) |
||||||||||
| Electricity ($/MWh) | $ | 56.30 | $ | 58.27 | (3 | %) | ||||
|
UNIT OPERATING COSTS (1) ($/MWh) |
||||||||||
| Base | 15.50 | 14.86 | 4 | % | ||||||
| Non-base(2) | 0.45 | 2.00 | (78 | %) | ||||||
| 15.95 | 16.86 | (5 | %) | |||||||
| NET CAPACITY FACTOR (%) | 67 | 67 | – | |||||||
| SPENDING ON CAPITAL AND SERVICE CONCESSION ARRANGEMENTS(3) | ||||||||||
| Sustaining | $ | 0.8 | $ | 0.1 | 700 | % | ||||
| Service concession arrangements | – | 1.9 | (100 | %) | ||||||
| $ | 0.8 | $ | 2.0 | (60 | %) | |||||
| (1) | For additional information see the Non-GAAP measures section of this release. | |
| (2) | Costs incurred at the Boca de Jaruco and Puerto Escondido facilities that otherwise would have been capitalized if these facilities were not accounted for as service concession arrangements. | |
| (3) | Includes accruals. | |
Power production in the first quarter of 217 GWh is unchanged from its year-ago quarterly level, and down marginally from its level in the fourth quarter of 2016. Average-realized prices are lower than the prior year comparable by 3%, due to the strengthening of the Canadian dollar against the U.S. dollar.
First quarter 2017 revenue of
Unit operating costs in the first quarter of 2017 declined by 5% from their comparable period in 2016, mainly due to the strengthening of the Canadian dollar.
Adjusted EBITDA of
Cash provided by operations of
Spending on capital in the first quarter of 2017 was lower than its comparable level a year ago, due to the absence of any service concession spending in the first quarter of 2017.
2017 STRATEGIC PRIORITIES
The table below lists Sherritt’s Strategic Priorities for 2017. The 2017 Strategic Priorities reflect the continuing cautious commodity price outlook and the Corporation’s responsibility to preserve liquidity, continue to drive down costs, improve organizational effectiveness and execute rational capital allocation plans. Sherritt’s purpose, originally communicated in 2014, continues to bea low-cost nickel producer that creates sustainable prosperity for our employees, investors and communities.
| Strategic Priorities | 2017 Targets | Status | ||
| UPHOLD GLOBAL OPERATIONAL LEADERSHIP IN FINISHED NICKEL LATERITE PRODUCTION | Further reduce NDCC at Moa and Ambatovy towards the goal of achieving or remaining in the lowest quartile of global nickel cash costs | First quarter NDCC of US$3.25/lb at the Moa JV represents cash costs at the 30th percentile, while Ambatovy NDCC of US$3.93/lb fell short of its target, due to lower production | ||
| Increase Ambatovy production and predictability over 2017 | Production guidance for the year remains in place | |||
| Achieve peer leading performance in environmental, health, safety and sustainability | Improvements to EHSS activities continue. The Lost Time Incident rate in Q1 was an improvement over the 2016 average | |||
| OPTIMIZE OPPORTUNITIES IN CUBAN ENERGY BUSINESS | Determine future capital allocation based on results from first two wells drilled on Block 10 | First well results have provided constructive data to optimize the drilling of the second well, again targeting the Lower Veloz formation | ||
| PRESERVE LIQUIDITY AND BUILD BALANCE SHEET STRENGTH | Finalize long-term Ambatovy equity and funding structure | Agreement on no defaulting shareholder status extended through May 2, 2017 | ||
| Optimize working capital and receivables collection | Cuban energy payments received were US$37.6 million in the first quarter of 2017, an improvement over Q4 2016 payments received of US$18.3 million | |||
| Operate Metals and Power businesses to be free cash flow neutral or better | Free cash flow generation of $12.6 million from Moa and Fort site and $12 million from Power in the first quarter of 2017 | |||
OUTLOOK
2017 PRODUCTION, UNIT OPERATING COST AND CAPITAL SPENDING GUIDANCE
In 2016, Sherritt made certain modifications to how guidance is presented, showing capital spending estimates in U.S. dollars, as well as their Canadian dollar equivalent. In the quarterly reporting, actual capital spending is presented in Canadian dollars consistent with Sherritt’s reporting currency, but estimates and forward looking information continue to be provided in US dollars. This change in presentation is intended to align with Sherritt’s capital budgeting practices, and to mitigate the change to capital spending that arises from translation to the Canadian dollar reporting currency. Capital projects in the Metals business are generally U.S. dollar expenditures, while in Oil & Gas, the expenditures are roughly 50% Canadian dollar denominated and 50% U.S. dollar denominated.
In 2017, Sherritt added Unit Operating Cost guidance.
| Production volumes, unit operating costs and spending on capital |
|
Guidance at 2016 December 31 |
|
Actual 2017 March 31 |
|
Revised Projected 2017 |
|
| Production volumes | |||||||
| Nickel, finished (tonnes, 100% basis) | |||||||
| Moa Joint Venture | 33,000-34,000 | 7,680 | No change | ||||
| Ambatovy Joint Venture | 48,000-52,000 | 9,543 | No change | ||||
| Total | 81,000-86,000 | 17,223 | No change | ||||
| Cobalt, finished (tonnes, 100% basis) | |||||||
| Moa Joint Venture | 3,500-3,800 | 872 | No change | ||||
| Ambatovy Joint Venture | 3,800-4,100 | 808 | No change | ||||
| Total | 7,300-7,900 | 1,680 | No change | ||||
| Oil – Cuba (gross working-interest, bopd) | 11,500-12,500 | 15,213 | No change | ||||
| Oil and Gas – All operations (net working-interest, boepd) | 6,400-7,000 | 8,889 | No change | ||||
| Electricity (GWh, 33⅓% basis) | 850-900 | 217 | No change | ||||
| Unit operating costs | |||||||
| NDCC (US$ per pound) | |||||||
| Moa Joint Venture | 3.20-3.70 | 3.25 | No change | ||||
| Ambatovy Joint Venture | 3.10-3.70 | 3.93 | No change | ||||
| Total | 3.14-3.70 | 3.59 | No change | ||||
| Oil and Gas – Cuba (unit operating costs, $ per barrel) | 11.00-12.00 | 8.66 | No change | ||||
| Electricity (unit operating cost, $ per MWh) | 18.75-19.50 | 15.95 | No change | ||||
| Spending on capital (US$ millions) | |||||||
| Metals – Moa Joint Venture (50% basis), Fort Site (100% basis) (1) | US$28 (38) | US$2 (2) | No change | ||||
| Metals – Ambatovy Joint Venture (40% basis) | US$45 (61) | US$6 (8) | No change | ||||
| Oil and Gas | US$55 (73) | US$2 (3) | No change | ||||
| Power (33 ⅓% basis) | US$1 (2) | US$1 (1) | No change | ||||
| Spending on capital (excluding Corporate) | US$129 (174) | US$11 (14) | No change | ||||
| (1) | Spending is 50% of US$ expenditures for Moa JV and 100% expenditures for Fort Site fertilizer and utilities. | |
NON-GAAP MEASURES
The Corporation uses combined results, Adjusted EBITDA, average-realized price, unit operating cost, and adjusted operating cash flow, and free cash flow to monitor the performance of the Corporation and its operating divisions and believes these measures enable investors and analysts to compare the Corporation’s financial performance with its competitors and evaluate the results of its underlying business. These measures do not have a standard definition under IFRS and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. As these measures do not have a standardized meaning, they may not be comparable to similar measures provided by other companies.
CONFERENCE CALL AND WEBCAST
Sherritt will hold its quarterly conference call and webcast tomorrow at
| Conference Call and Webcast: | April 27, 2017, 10:00 a.m. ET | |
| North American callers, please dial: | 1-800-347-6311 | |
| International callers, please dial: | 416-642-5211 | |
| Live webcast: | www.sherritt.com |
An archive of the webcast will also be available on the website. The conference call will be available for replay until
COMPLETE FINANCIAL STATEMENTS AND MANAGEMENT’S DISCUSSION AND ANALYSIS
Sherritt’s complete interim condensed consolidated financial statements and MD&A for the three months ended
ABOUT SHERRITT
Sherritt, which is celebrating its 90th anniversary in 2017, is the world leader in the mining and refining of nickel from lateritic ores with projects and operations in
Source: Sherritt Investor Relations
FORWARD-LOOKING STATEMENTS
This press release contains certain forward-looking statements. Forward-looking statements can generally be identified by the use of statements that include such words as “believe”, “expect”, “anticipate”, “intend”, “plan”, “forecast”, “likely”, “may”, “will”, “could”, “should”, “suspect”, “outlook”, “potential”, “projected”, “continue” or other similar words or phrases. Specifically, forward-looking statements in this document include, but are not limited to, statements set out in the “Outlook” sections of this press release and certain expectations about capital costs and expenditures; production volumes; capital project completion and ramp up dates; future price of key commodities; sales volumes; revenue, costs, and earnings; sufficiency of working capital and capital project funding; results of on-going discussions regarding the partnership structure and future financing arrangements at the Ambatovy Joint Venture; results of discussions regarding timing of ongoing Cuban payments; completion of development and exploration wells; and amounts of certain joint venture commitments.
Forward-looking statements are not based on historic facts, but rather on current expectations, assumptions and projections about future events. By their nature, forward-looking statements require the Corporation to make assumptions and are subject to inherent risks and uncertainties. There is significant risk that predictions, forecasts, conclusions or projections will not prove to be accurate, that those assumptions may not be correct and that actual results may differ materially from such predictions, forecasts, conclusions or projections.
The Corporation cautions readers of this press release not to place undue reliance on any forward-looking statement as a number of factors could cause actual future results, conditions, actions or events to differ materially from the targets, expectations, estimates or intentions expressed in the forward-looking statements. These risks, uncertainties and other factors include, but are not limited to changes in the global price for nickel, cobalt, oil and gas or certain other commodities, share-price volatility, level of liquidity and access to capital resources, access to financing, risk of future non-compliance with debt restrictions and covenants; risks associated with the Corporation’s joint venture partners; discrepancies between actual and estimated production; variability in production at Sherritt’s operations in
The Corporation may, from time to time, make oral forward-looking statements. The Corporation advises that the above paragraph and the risk factors described in this press release and in the Corporation’s other documents filed with the Canadian securities authorities should be read for a description of certain factors that could cause the actual results of the Corporation to differ materially from those in the oral forward-looking statements. The forward-looking information and statements contained in this press release are made as of the date hereof and the Corporation undertakes no obligation to update publicly or revise any oral or written forward-looking information or statements, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. The forward-looking information and statements contained herein are expressly qualified in their entirety by this cautionary statement.
For further investor information contact:
Investor Relations
Telephone: 416.935.2451
Toll-free: 1.800.704.6698
E-mail: investor@sherritt.com
www.sherritt.com