Sherritt International (S) Q4 2025 earnings summary

Executive summary

• Leadership and board changes included a new Chair, interim CEO, and new directors, with a permanent CEO search ongoing.

• A comprehensive operational turnaround plan at Moa was launched, focusing on restoring production, reliability, and efficiency through debottlenecking and equipment upgrades.

• Cost reduction initiatives, including workforce and executive team reductions, are expected to deliver $20 million in annual savings, in addition to $17 million from the previous year.

• Major debt restructuring in April 2025 reduced obligations by $68 million, extended maturity to 2031, and lowered annual interest expense by $3 million.

• Power division delivered record dividends, doubling the prior year, supporting liquidity and reflecting operational improvements.

Financial highlights

• Combined revenue for 2025 was $532.9 million, down 8% year-over-year, with Q4 revenue at $163.2 million, up slightly from the prior year.

• Net loss from continuing operations was $65.4 million for 2025, improved from $73.1 million in 2024; adjusted EBITDA fell 78% to $7.1 million.

• Available liquidity in Canada at year-end was $43.7 million, with cash and cash equivalents totaling $124.9 million.

• Power division produced 799 GWh in 2025, with unit operating cost at $23.33/MWh, at the low end of guidance.

• Metals: 2025 finished nickel and cobalt production (100% basis) were 25,240 tonnes and 2,728 tonnes, both within revised guidance; NDCC was US$5.96/lb.

Outlook and guidance

• 2026 guidance targets finished nickel production of 26,000–28,000 tonnes and cobalt of 2,750–2,850 tonnes (100% basis), both up from 2025.

• NDCC for nickel expected at US$5.75–$6.25/lb, supported by higher production, cost optimization, and higher cobalt credits.

• Power division expects 825–875 GWh electricity production and unit operating costs of $27.25–$28.75/MWh in 2026.

• Sustaining capital spending for Metals projected at $35–$40 million, with $25–$30 million for the tailings facility and $2.5–$5 million for debottlenecking projects.

• No cash or cobalt distributions expected under the Cobalt Swap in 2026; Energas dividends in Canada forecast at $20–$25 million.