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Sherritt profit rises, but short of estimates

The executive chairman of Sherritt International Corp., Ian W. Delaney.

DEREK OLIVER/CP

Sherritt International Corp. says its profit and revenue grew by double digits in the second quarter, but its results fell short of analyst estimates.

The diversified mining company said its profit was $60.1-million or 20 cents per share.

That's up 20 per cent from $50.2-million or 17 cents per share in the same period a year earlier.

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The Toronto-based company's revenue improved 23 per cent to $500.6-million from $406.3-million.

Estimates compiled by Thomson Reuters indicated analysts expected a better quarter from Sherritt. The consensus was for 25 cents per share of earnings. The one estimate for revenue was $546.6-million.

Sherritt said the higher revenue was primarily from its thermal coal, oil and nickel businesses.

Coal accounted for about half of Sherritt's revenue during the quarter, rising to $254.1-million from $189.8-million. However, its earnings from operations fell to $18.6-million from $28.2-million.

Sherritt attributed the lower earnings from coal to higher mining costs, the impact of a stronger dollar relative to the U.S. dollar and the timing of shipments at its Mountain operations. Those negatives were offset by higher prices for thermal coal exports, the impact of an acquisition and higher royalty and coal revenue from its Prairie operations.

Revenue from metals including nickel grew to $149.4-million from $138.3-million while oil and gas generated $81.5-million in revenue, up from 63.7 million. Sherritt's power division increased revenue to $13-million from $12.3-million.

The company's Ambatovy joint venture nickel project in Madagascar continued to advance towards production, with about 2,000 construction workers demobilized during the quarter.

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