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 a successful marketing strategy and cost reductions.

• 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 from $652.9 million in 2023, but Q4 revenue rose 14% year-over-year to $160.3 million.

• Adjusted EBITDA for 2024 was $32.4 million, down from $46.2 million in 2023; Q4 2024 Adjusted EBITDA was $15.4 million, a turnaround from a loss in Q4 2023.

• Net loss from continuing operations was $73.1 million in 2024, with an adjusted net loss of $56.3 million, excluding non-cash impairments.

• Ended 2024 with $145.7 million in cash and cash equivalents and $62.4 million in available liquidity in Canada.

• Received $13 million in dividends from Energas in 2024, expected to double to $25–30 million in 2025.

Outlook and guidance

• 2025 guidance anticipates finished nickel production of 31,000–33,000 tonnes and cobalt of 3,300–3,600 tonnes, both higher year-over-year, with ramp-up of Moa JV expansion weighted to the second half.

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

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

• Sustaining capital spending (excluding tailings) expected at $35 million; tailings facility capital at $40 million (50% basis) in 2025 and 2026.

• Expect further Cobalt Swap distributions and Energas dividends in 2025, with Energas dividends projected at $25–30 million.