Buoyant nickel and oil prices combined with strong operational performance allowed
Net earnings in 1999 were $66.6 million (or 60 per restricted voting share) on consolidated revenue of $372.3 million. Net earnings for the fourth quarter of 1999 were $23.5 million (25 per share) on revenue of $112.7 million.
In 1998, the company recorded a net loss of $46 million (98 per share) on revenue of $312.8 million as a result of a fourth-quarter writedown of oil and gas assets totalling $70.8 million, after tax. Excluding the impact of this one-time adjustment, consolidated net earnings in 1999 increased by $41.8 million from 1998, and fourth-quarter net earnings were $25.6 million higher than in the corresponding period of the previous year.
With its stronger balance sheet, Sherritt is now considering retiring its outstanding convertible debentures prior to maturity. The company will offer to buy up to $25 million (principal amount) of its outstanding 6% convertible unsecured subordinated debentures.
Sherritt also intends to seek shareholder approval at its annual general meeting in May to reduce the stated capital of its restricted voting shares to allow for the institution of a quarterly dividend as of the second quarter of 2000.
At year-end, Sherritt’s cash and short-term investments stood at $386 million. The major uses of cash for the year were capital expenditures of $87.8 million, an equity investment in Australia’s Anaconda Nickel of $63.1 million, and debenture interest payments of $40.5 million.
The Fort Saskatchewan refinery in Alberta set annual production records for both nickel and cobalt for the fourth consecutive year. Total finished nickel production for 1999 was 28,643 tonnes, 4% above the record production of 27,434 tonnes established in 1998. Total finished cobalt production of 2,770 tonnes in 1999 surpassed last year’s total finished cobalt production of 2,645 tonnes by 5%.
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