TORONTO – Sherritt International Inc. (TSX:S) reported a loss of $30.1 million in its latest quarter, mainly due to its Ambatovy joint venture nickel and cobalt mine in Madagascar.
The loss amounted to 10 cents per share in the quarter. That compared with a loss of $10.7 million, or four cents per share, in the same quarter of 2013.
Revenue increased seven per cent to $130.2 million from $121.7 million a year ago.
Sherritt said its share of losses at the Ambatovy project included depletion, depreciation and amortization charges totalling $40.3 million. The company owns a 40 per cent stake in the project which is ramping up operations.
The quarterly loss came as the prices for nickel and cobalt continued to improve from 2013 as many anticipate nickel shortages due to an Indonesian mineral export ban on raw ore exports. Nickel prices are up 35 per cent since the start of the year, while cobalt prices have also increased, gaining 13 per cent year-to-date, reflecting continued demand.
The company said nickel and cobalt production at the Ambatovy was slightly better than the first quarter and increased 26 per cent and 14 per cent, respectively, over the prior year period.
During the quarter, Sherritt said it continued evaluating its operations and capital allocation for operating efficiencies and has realized $25 million in savings year-to-date.
“During the second quarter, we made clear steps forward in executing our long-term plan to refocus on base metals and our Cuban oil business,” president and CEO David Pathe said in a statement on Wednesday.
“The strong nickel market has had positive benefits in our metals business and we remain committed to ramping up at Ambatovy towards financial completion next year. In Cuba, we achieved a significant milestone with the approval of an important oil PSC (production sharing contract) that will extend our oil and gas operations and continue to strengthen our relationship with the country,” he said.
In May, an activist shareholder failed in his attempt to join the board at Sherritt.
A vote held at Sherritt’s annual general meeting saw the majority of shareholders back all nine of the management’s director nominees.