Following a $72.3-million writedown on the carrying value of its oil-and-gas assets in Cuba and Italy, Sherritt International ended last year in the red. (After tax, the value of the oil-and-gas writedown was $70.8 million.)
The Toronto-based conglomerate incurred a 1998 loss of $46 million (or 98 cents per restricted voting share) on revenue of $312.9 million, compared with earnings of $37.3 million on revenue of $349.4 million in 1997.
Sherritt attributes the revenue decline to lower realized commodity prices and the spinoff, in 1997, of its metallurgical consulting business into
These declines were partially offset by Sherritt’s new telecommunications venture and growth in oil sales volume.
Cash from operations rose by 46% in 1998 to $113.8 million, compared with $78.1 million in 1997. At Dec. 31, 1998, Sherritt had cash and short-term investments totalling $510.4 million.
Sherritt’s metals division consists primarily of a half-interest in a vertically integrated nickel-cobalt equal joint venture with the Cuban government. The partners co-own mining and processing facilities at Moa, Cuba, and a refinery at Fort Saskatchewan, Alta.
In 1998, the metals division had operating earnings of $13.9 million on revenue of $177.6 million, compared with $41.2 million on revenue of $211.8 million in the previous year.
Continuing operational improvements at Moa resulted in a production record for the fourth consecutive year. Production of mixed sulphides rose to 27,066 tonnes in 1998, compared with 26,512 tonnes in 1997, 26,034 tonnes in 1996 and 20,651 tonnes in 1995.
The Fort Saskatchewan refinery set production records for both nickel and cobalt for the third consecutive year. Total finished nickel production was 27,434 tonnes, up 7% from 25,644 tonnes in 1997, while total finished cobalt production was up 18% to 2,645 tonnes.
Sherritt’s attributable nickel and cobalt production was 13,717 tonnes and 1,322 tonnes, respectively, in 1998, compared with 14,150 tonnes nickel and 1,248 tonnes cobalt in 1997.
Capital expenditures for the metals division last year were $20.6 million, two-thirds of which was directed at mining and processing operations at Moa, with the remainder spent at Fort Saskatchewan.
Apart from the nickel-cobalt and petroleum assets, Sherritt is active in fertilizers, power generation, telecommunications, tourism and agriculture.
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