Sherritt International Corp. reported a $17.2-million loss in its latest quarter as it wrote down the value of two coal-related projects in Western Canada due to economic conditions.
The mining company said Wednesday the loss amounted to 6 cents per share for the quarter. The loss compared with a profit of $28.1-million or 10 cents per share a year ago.
During the quarter, Sherritt wrote off $10.9-million in development costs at its Dodds-Roundhill coal gasification project and $5.6-million related to its investment on its Bow City Power project.
After adjusting for the writedowns and other non-cash items, Sherritt said net earnings were $6.2-million or 3 cents per share.
Analysts had estimated 11 cents per share of net income and 6 cents per share of adjusted earnings.
Sherritt’s revenue was down from last year, as it received lower prices for the commodities it produces, but came in slightly above analyst estimates.
Its revenue fell to $467.9-million — about $11-million above the consensus estimate — from $536.8-million in the fourth quarter of 2011.
During the quarter, the company sold 9.7 million pounds of nickel, one million pounds of cobalt, 9.1 million tonnes of thermal coal, one million barrels of oil and 162 GWh of electricity.
The Dodds-Roundhill project has proposed to produce synthesis gas that can be used for fuel, as a petrochemical feedstock or further processed into high purity hydrogen that could be used by bitumen upgraders in Alberta.
However, North American natural gas prices have been depressed by a glut of supply as advanced drilling techniques have unlocked huge volumes from shale formations across the continent.
On Tuesday, Sherritt increased its quarterly dividend to 4.3 cents per share from 3.8 cents per share. The new dividend will be paid April 12 to shareholders of record at of the close of business on March 29.
Sherritt produces nickel from operations in Canada, Cuba, Indonesia and Madagascar, an island off the east coast of Africa.
The company is also the largest producer of thermal coal in Canada and the largest independent energy producer in Cuba, with extensive oil and power operations across the Caribbean island.