Sherritt International (S) Q4 2024 earnings summary

Executive summary

• Achieved strong operational performance in 2024, with metals and power divisions meeting or exceeding guidance despite multi-year lows in nickel and cobalt prices and external disruptions in Canada and Cuba.

• Nickel sales volumes rose 22% year-over-year, reaching the highest quarterly level in two years, supported by successful marketing and cost reduction initiatives.

• Organizational restructuring and cost reduction initiatives are expected to yield $17 million in annualized savings.

• Cobalt Swap distributions provided $29.8 million in Q4, including $23.7 million in cash and 223 tonnes of cobalt.

• Power division dividends in Canada totaled $13 million in 2024, with $25–30 million expected in 2025.

Financial highlights

• Combined revenue for 2024 was $577.6 million, down 12% year-over-year; Q4 revenue was $160.3 million, up 14% from Q4 2023.

• Adjusted EBITDA was $15.4 million in Q4 and $32.4 million for the year, down 30% from 2023.

• Net loss from continuing operations was $22.5 million in Q4 and $73.1 million for the year; adjusted net loss was $10.2 million in Q4 and $56.3 million for the year.

• Cash and cash equivalents at year-end were $145.7 million, with available liquidity in Canada of $62.4 million.

• Cobalt Swap and Energas dividends supported liquidity, with Energas dividends expected to double to $25–30 million in 2025.

Outlook and guidance

• 2025 guidance: finished nickel production of 31,000–33,000 tonnes and cobalt of 3,300–3,600 tonnes (100% basis), both expected to increase year-over-year.

• NDCC for nickel expected at US$5.75–6.25/lb, reflecting higher input costs and lower cobalt by-product credits.

• Power division electricity production guidance is 800–850 GWh, with unit operating costs of $23.00–24.50/MWh.

• Sustaining capital spending for metals set at $35 million (excluding tailings facility); $40 million allocated for tailings management.

• Dividends from Energas in Canada projected at $25–30 million in 2025.