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Sherritt Q4 profits slip 33% on early debt extinguishment charge

22nd Feb 2012, 2:54 pm by Brad Lemaire
Sherritt Q4 profits slip 33% on early debt extinguishment charge

Nickel and thermal coal producer Sherritt International Corp. (TSE:S) said Wednesday its fourth quarter profit slipped 33 percent due to a charge tied to early debt extinguishment.

For the quarter ended December 31, the company said net earnings fell to $28.1 million, or 10 cents a share, compared to a year-ago profit of $42.7 million, or 15 cents a share. Revenue came in at $536.8 million from $485.2 million.

The company said it booked an $18.2 million, or six cents per share, premium payment for the early redemption of $274 million principal amount of unsecured debt.

It also took an $8.2 million charge related to an increase in depletion and amortization related to a reassessment of environmental rehabilitation provisions in metals and coal.

Analysts polled by Bloomberg were predicting per share earnings of 18 cents, and revenue of $523 million.

Operating cash flow for the fourth quarter was $103.2 million, down from $138.3 million last year.

Spending on operations grew to $81.8 million from $55.8 million in the year-earlier period. Spending on capital in the Ambatovy project was $148.9 million lower than previous quarters due to the completion of construction.

The company spent $5.2 billion on the project in 2011, nearing the estimated $5.5 billion total cost. The mine is expected to be commercially operational by the end of 2012.

For the quarter, sales volumes totalled 10.2 million pounds of Nickel, 1.1 million pounds of cobalt; 9.8 million tonnes of thermal coal, 1.1 million barrels of oil and 157 gigawatt hours of electricity. 

Besides its Nickel and cobalt operations, the company is the largest producer of thermal coal in Canada and also owns mining and oil and gas operations in Cuba as well as a stake in power utility Energas, which has power plants across the country with a combined capacity of 356 megawatts.

Sherritt, which has over 6,800 employees and a stock market value of more than $1.5 billion, also licenses its Nickel mining
technology to other metals companies.

The company's share price shed 3.03 percent at $6.40 in trade on the Toronto Stock Exchange on Wednesday afternoon.

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