Sherritt (TSX:S) looks for good year after Q1 profit soars 116 per cent – Dominion Lending Centres Clearlease

Sherritt (TSX:S) looks for good year after Q1 profit soars 116 per cent - Dominion Lending Centres Clearlease

VANCOUVER, BRITISH COLUMBIA – (April 27, 2011) Clearlease Reports After a first quarter that saw profits at Sherritt International Corp. (TSX:S) more than double, CEO Ian Delaney is looking for the good times to continue into the next and hopefully for the rest the year as well.

“A good quarter. . . . revenues up, commodity prices up,” Delaney told a conference call while speaking by telephone from an unnamed “remote” company location.

The Toronto-based miner and energy company did experience pressure from commodity input price increases and, on the coal side, some “transportation equipment delays and one thing or another keeping cost up,” he said.

“But the good news is that the output commodity prices are very robust.”

“In the nickel world and cobalt world, we think that in the foreseeable quarter or so we see no good reason to presume that commodity prices are going to slack off, so we’re continuing to look for robust earnings in those areas.”

“In the coal world, I think we’re looking at a dramatically better year for our (thermal) coal business,” he said.

Although the earthquake and tsunami in Japan have delayed settlement of the year’s contract price, Delaney noted that the Newcastle price is currently just under $130 a tonne.

“The Newcastle price is generally a pretty good indicator where the annual contract prices are likely to settle in and, at those contract prices, I think we have a very good time in the coal business,” he said.

Earlier, Sherritt reported that its first-quarter net earnings were up 116 per cent at $63.6 million or 22 cents per share, compared with $29.4 million or 10 cents per share in the same 2010 quarter.

Revenue was also up sharply at $474.5 million from $366.4 million in the 2010 quarter.

Net earnings for the quarter included an unrealized foreign exchange loss, after tax, of $3.2 million and equivalent to one cent per share. That was due mainly to the impact of the change in value of the Canadian dollar relative to the U.S. greenback on the corporation’s $700-million of U.S. dollar denominated partner loans for the Ambatovy nickel project in Madagascar.

Sherritt, the project operator, owns 40 per cent of Ambatovy, while Sumitomo and Korea Resources each have a 27.5 per cent stake. The project’s engineering contractor, Montreal-based SNC-Lavalin Group (TSX:SNC), has a five per cent interest.

Sherritt had been struggling with ballooning costs and legal and technical difficulties at Ambatovy, but Delaney indicated things have improved markedly.

“My focus in the past few months has increasingly changed from construction to production,” he said.

“Still don’t know a firm date . . . as to when we think we’ll actually be deemed to be complete, but in my mind we’re almost complete now and we’ll be in partial production within a couple of months.”

In the first quarter, nickel mining and refining revenues increased to $110.74 million from $86.4 million in the comparable year-earlier period as the average realized price rose to $11.73 a pound from $9.20 “due to stronger demand and a weaker U.S. dollar.”

Revenues in the coal segment soared even more, up almost $68 million to $245.9 million from $178.1 million in the 2010 quarter despite a nine per cent decrease in thermal coal production at its Prairie operations, where two-coal fired generating units were removed from service by a mine customer.

However, realized pricing — excluding royalties, activated carbon and char — were 12 per cent or $1.67 a tonne higher, mainly due to the similar contract revenue on lower sales volumes at the Highvale mine, the company said in a release.

Sherritt is a world leader in the mining and refining of nickel from lateritic ores, with projects and operations in Canada, Cuba and Indonesia as well as Madagascar.

The company is also the largest coal producer in Canada and is the largest independent energy producer in Cuba, with extensive oil and power operations across the Caribbean island.

On the Toronto Stock Exchange, Sherritt shares were up two cents at $7.77 in afternoon trading Wednesday.

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About Dominion Lending Centres Clearlease

Dominion Lending Centres Clearlease Commercial (DLC Clearlease/Clearlease.com) is a fully diversified Lease Finance Mortgage Banking Brokerage Company specializing in Equipment Leasing, Automobile Leasing, Residential, Commercial Lending/Mortgage Financing. DLC Clearlease possesses the capability to accommodate financing needs ranging from a small second Home Mortgage to a Multi-Million Dollar Commercial Projects. No mortgage is too small or too large for this integrated Company.

Equipment Lease Financing in Vancouver, Surrey, Delta, Richmond, Langley, New Westminster, North Vancouer, West Vancouver, B.C. Also offering Automobile Lease Financing and Mortgage information. Founded by the Pidgeon brothers.

You may have recently seen a Dominion Lending advertisement on such media outlets as: Global News, CTV News, CBC Television, Rogers Sportsnet or possibly heard the great Don Cherry, a Canadian Sports legend, discuss Dominion Lending Centres.

Contact DLC Clearlease.com:

Dominion Lending Centres Clearlease
HEAD OFFICE, Bentall Two, Suite 900, 555 Burrard Street, Vancouver, BC, V7X 1M8, CANADA.
Mr. A. Pidgeon, Editor in Chief
Tel: (604) 696-1221 ext. 177
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