Canada's largest thermal coal producer, Sherritt International Corp. , says fourth-quarter earnings fell by a third as it took a hit from an early debt redemption.
The Toronto-based miner said earnings were $28.1-million or 10 cents per share, down from $42.7-million or 15 cents per share in the year-earlier period. Revenue grew to $536.8-million from $485.2-million.
For the full year, net earnings were $197.3-million or 67 cents per share, up from $144.8-million 49 cents per share in 2010. The increase was largely due to higher market pricing for export thermal coal and oil.
The company said it booked an $18.2-million premium payment for the early redemption of $274-million principal amount of unsecured debt.
It also took a $8.2-million charge related to an increase in depletion and amortization related to a reassessment of environmental rehabilitation provisions.
Operating cash flow for the fourth quarter was $103.2-million, down from $138.3-million in the year-earlier period.
Spending increased to $81.8-million from $55.8-million in the fourth quarter of 2010.
Long-time CEO Ian Delaney retired at the end of last year but will remain chairman. Sherritt's former chief financial officer, David Pathe replaced him as CEO on Jan. 1.
Besides its nickel and cobalt operations, the company is the largest producer of thermal coal in Canada and also owns mining and oil and gas operations in Cuba as well as a stake in power utility Energas, which has power plants across the country with a combined capacity of 356 megawatts.
Sherritt, which has more than 6,800 employees and a stock market value of more than $1.5-billion, also licenses its nickel mining technology to other metals companies.
The company has also cashed in on the global commodities boom of the last decade and last year extended its work schedule and increased estimated costs for its Ambatovy nickel-cobalt mine project in Madagascar.
It cited a litany of problems including poor performance by contractors and inaccurate estimates on the project in the island country off the east coast of Africa.
Spending on capital in the Ambatovy project was $148.9-million (U.S.) in the quarter, lower than previous quarters due to the completion of construction. The company spent $5.2-billion on the project in 2011, nearing the estimated $5.5-billion total cost.
The mine is expected to be commercially operational by the end of 2012.
Capital spending in 2012 is expected to increase to $299-million (Canadian) from $236-million in 2011.