Miner Sherritt posts fall in Q2 revenue, cuts 2025 nickel output guidance

Overview

• Sherritt Q2 revenue falls 15% yr/yr to C$43.7 mln

• Adjusted EBITDA comes in at C$2.6 mln

• The miner and refiner of nickel and cobalt lowers metals production guidance due to Cuban challenges

• Cost reduction measures to save C$20 mln annually

Outlook

• Sherritt lowers 2025 nickel production guidance to 27,000-29,000 tonnes from 31,000 to 33,000 tonnes

• Company revises cobalt production guidance to 3,000-3,200 tonnes for 2025 from 3,300 to 3,600 tonnes

• Sherritt reduces 2025 sustaining capital guidance to C$30 mln from $35.0 million

• Electricity production expected at lower end of 800-850 GWh range

Result Drivers

• CUBAN CHALLENGES - Lower production at Moa due to challenging operating environment in Cuba

• HIGH PAYABILITIES - Limited ability to supplement Moa JV production with third-party feed due to high Chinese payabilities

• COST REDUCTIONS - Workforce reduction and other measures expected to save C$20 mln annually

Key Details

Analyst Coverage

• The one available analyst rating on the shares is "hold"

• The average consensus recommendation for the diversified mining peer group is "buy."

• Wall Street's median 12-month price target for Sherritt International Corp is C$0.25, about 40% above its July 28 closing price of C$0.15

Press Release: ID:nBw9k6gyda