Sherritt International Corp. reported a sharp drop in its first quarter earnings compared with a year ago, hit by lower nickel prices and higher costs.
The Toronto-based miner, which has operations in Cuba, said Wednesday it earned $32.3-million or 11 cents per share in its latest quarter compared with a profit of $63.6-million or 22 cents per share a year ago.
Revenue for the three months ended March 31 totalled $462.2-million, down from $474.5-million.
"Continued pressure on input commodity costs, combined with lower realized nickel and cobalt prices, adversely affected the margin in metals, which was partially offset by stronger results from oil and gas," Sherritt president and chief executive David Pathe said in a statement.
The company's average realized nickel price in the quarter amounted to $8.66 per pound, down from $11.73 a year ago, while Sherritt received $14.10 per pound of cobalt, down from $17.55.
Overall nickel revenue fell to $82.8-million in the first three months of the year compared with $110.7-million a year ago, while cobalt revenue dropped to $14.4-million, from $17.8-million.
Meanwhile, oil and gas revenue improved to $82.2-million, up from $70.5-million. Coal revenue came in at $245.3-million, compared with $245.9-million.
Sherritt produces nickel from projects and operations in Canada, Cuba, Indonesia and Madagascar, an island off the east coast of Africa.
The company is also the largest producer of thermal coal in Canada and the largest independent energy producer in Cuba, with extensive oil and power operations across the island.
Mr. Pathe, who was Sherritt's chief financial officer, took over as chief executive of the company on Jan. 1. He replaced long-time chief executive Ian Delaney, who remains chairman of the Toronto-based mine.
Last year, Sherritt extended its work schedule and increased estimated costs for its Ambatovy project in Madagascar. It cited a litany of problems including poor performance by contractors and inaccurate estimates on the project in the island country off the east coast of Africa.
The company has said the capital cost of the project will come in at $5.5-billion (U.S.), about 16 per cent more than it had previously predicted.
Sherritt, which has more than 6,800 employees and a stock market value of more than $1.5 billion, also licenses its nickel mining technology to other metals companies.