Sherritt International Corporation · TSX:S
Sherritt International — Q1 2024 Earnings Presentation
31 slides from Sherritt International's earnings presentation, May 8, 2024
Slide 1: Q1 2024 Conference Call
Sherritt International Corporation Q1 2024 Conference Call Review of Financial and Operational Results May 9, 2024 SHERRITT.COM • TSX: S
Slide 2: Presenters
Presenters Leon Binedell President & CEO Yasmin Gabriel CFO Elvin Saruk COO 2
Slide 3: Forward-Looking Statements
Forward-Looking Statements This presentation contains certain forward-looking statements. Forward-looking statements legislation; political, economic and other risks of foreign operations, including the impact of Readers are cautioned that the foregoing list of factors is not exhaustive and should b
Slide 4: First Quarter 2024 Highlights
First Quarter 2024 Highlights Moa JV expansion: Slurry Preparation Plant is operating at design capacity. Processing plant remains on schedule for commissioning and ramp up in 2025 Increased liquidity in Canada to $68 million from $63 million at end of Q4 2023 Reduced nickel inventory through strong
Slide 5: First Quarter 2024 Improvements in Key Metrics
First Quarter 2024 Improvements in Key Metrics Mixed Sulphides Production Nickel Sales NDCC(1) Available Liquidity in (tonnes) (tonnes) (US$/lb of nickel sold) Canada ($ in M) 4,052 4,023 68 63 $7.87 3,514 3,511 $7.24 $6.00 - $5.50 2024 Guidance Midpoint Represents 20% Decrease from FY2023 Q4 2023 Q
Slide 6: Review of Operations
Review of Operations New Slurry Preparation Plant, Moa Cuba 6
Slide 7: Metals First Quarter Production
Metals First Quarter Production Mixed sulphides → Benefitted from higher ore grades and positive impact of Production volumes Q1 2024 Q1 2023 (tonnes)(1) Slurry Preparation Plant Mixed Sulphides 4,052 3,750 Finished nickel and cobalt Finished Nickel 3,597 3,483 → Higher nickel rich third-party feed
Slide 8: Metals First Quarter Sales
Metals First Quarter Sales Sales volume Q1 2024 Q1 2023 (tonnes)(1) Finished nickel and cobalt Finished Nickel 4,023 3,344 → Nickel sales: Successful contract renewal and strong spot Finished Cobalt 362 731 sales drove progress on reducing opening nickel inventory → Cobalt sales: Consistent with low
Slide 9: Metals First Quarter Net Direct Cash Costs (NDCC)
Metals First Quarter Net Direct Cash Costs (NDCC) (1) Mining, processing and refining (MPR)(2) First Quarter 2024 Results Year Over Year Change → Lower MPR costs due to lower input commodity NDCC(1) (US$/lb of nickel sold) prices, lower maintenance costs and the impact of higher nickel sales volumes
Slide 10: Moa JV Expansion Update
Moa JV Expansion Update Slurry Preparation Plant → Completed construction in Q4 2023, under budget → Began processing ore at design capacity in January 2024 Processing Plant → Civil construction and structural erection is nearing completion → Taking prudent approach to minimize near-term spending wi
Slide 11: Power First Quarter Results
Power First Quarter Results Electricity production → 33% YoY increase Operating Results(2) Q1 2024 Q1 2023 → Improved gas availability (since end of Q2 2023) Electricity Production → Improved equipment availability 210 158 (GWh(3)) Unit Operating Costs(1) 17.12 19.37 Unit operating cost(1) ($/MWh(3)
Slide 12: Financial Highlights
Financial Highlights 12
Slide 13: Financial Performance First Quarter Results
Financial Performance First Quarter Results Financial Results Financial performance notable drivers: ($ millions) Q1 2024 Q1 2023 → Lower average-realized prices(2) Revenue(1) 28.8 58.6 → Nickel 40% → Cobalt 24% Combined revenue(2)(3) 127.7 187.4 → Fertilizers 27% → Improved nickel sales volumes
Slide 14: Available Liquidity in Canada First Quarter Update
Available Liquidity in Canada First Quarter Update $37.5M First Quarter changes include → Fort Site cash provided by operating activities $11.3M on strong $67.9M fertilizer presales Available Liquidity in → Receipt on short-term advance to the Moa JV $3.0M Canada → Property, plant and equipment spen
Slide 15: Summary
Summary Moa, Cuba 15
Slide 16: Strategic Developments Midstream Processing
Strategic Developments Midstream Processing Midstream processing → Advanced mixed hydroxide precipitate (MHP) midstream processing flowsheet for production of nickel and cobalt sulphate while also reducing sodium sulphate effluent, a key environmental challenge for the industry → Project focus in 20
Slide 17: First Quarter 2024 Summary
First Quarter 2024 Summary → Increased liquidity in Canada → Delivered on cost-cutting initiatives → Received repayments from Moa JV on advances → Cobalt Swap distributions expected to commence in H2 2024 following full repayment of the Moa JV advances in H1 2024 → NDCC(1) trending to range between
Slide 18: Q&A Discussion
Q&A Discussion Streambank restoration, Fort Saskatchewan, Alberta 18
Slide 19: Sherritt International Corporation
SHERRITT INTERNATIONAL CORPORATION 22 Adelaide West, Suite 4220 Toronto, Ontario, Canada M5H 4E3 Tom Halton, Director, Investor Relations and Corporate Affairs Telephone: S E P T E M B E416.935.2451 R 2024 | Toll -Free: 1.800.704.6698 Email: investor@sherritt.com SHERRITT.COM • TSX: S
Slide 20: Appendix: Non-GAAP and other financial measures
APPENDIX Non-GAAP and other financial measures 20
Slide 21: Combined revenue
Combined revenue The Corporation uses combined revenue as a measure to help management assess the Corporation’s financial performance across its core operations. Combined revenue includes the Corporation’s consolidated revenue, less Oil and Gas revenue, and includes the revenue of the Moa JV within
Slide 22: Adjusted EBITDA
Adjusted EBITDA The Corporation defines Adjusted EBITDA as (loss) earnings from operations and joint venture, which excludes net finance expense, income tax expense and loss from discontinued operations, net of tax, as reported in the financial statements for the period, adjusted for: depletion, dep
Slide 23: Adjusted EBITDA (continued)
Adjusted EBITDA (continued) 2023 $ millions, for the three months ended March 31 (Restated) Adjustment Corporate for Moa Oil and and Joint Metals(1) Power Gas Other Venture Total Earnings (loss) from operations and joint venture per financial statements $ 31.0 $ 5.9 $ (1.4) $ (10.0) $ (3.9) $ 21.6 A
Slide 24: Average-realized price
Average-realized price Average-realized price is generally calculated by dividing revenue by sales volume for the given product in a given segment. The average-realized price for power excludes by-product and other revenue, as this revenue is not earned directly for power generation. Transactions by
Slide 25: Average-realized price (continued)
Average-realized price (continued) $ millions, except average-realized price and sales volume, for the three months ended March 31 2023 Metals Adjustment for Moa Joint Nickel Cobalt Fertilizer Power Other(1) Venture Total Revenue per financial statements $ 121.4 $ 30.8 $ 16.9 $ 10.3 $ 10.1 $ (130.9)
Slide 26: Unit operating cost/Net direct cash cost (NDCC)
Unit operating cost/Net direct cash cost (NDCC) With the exception of Metals, which uses NDCC, unit operating cost is generally calculated by dividing cost of sales as reported in the financial statements, less depreciation, depletion and amortization in cost of sales, the impact of impairment losse
Slide 27: Unit operating cost/Net direct cash cost (continued)
Unit operating cost/Net direct cash cost (continued) $ millions, except unit cost and sales volume, for the three months ended March 31 2023 Adjustment for Moa Joint Metals Power Other(1) Total Venture Cost of sales per financial statements $ 144.5 $ 3.4 $ 7.7 $ (96.3) $ 59.3 Less: Depletion, deprec
Slide 28: Adjusted net earnings/loss from continuing operations and per share
Adjusted net earnings/loss from continuing operations and adjusted net earnings/loss from continuing operations per share The Corporation defines adjusted net earnings/loss from continuing operations as net earnings/loss from continuing operations less items not reflective of the Corporation’s curre
Slide 29: Adjusted net earnings/loss from continuing operations per share (continued)
Adjusted net earnings/loss from continuing operations and adjusted net earnings/loss from continuing operations per share (continued) 2024 2023 For the three months ended March 31 $ millions $/share $ millions $/share Net (loss) earnings from continuing operations $ (40.9) $ (0.10) $ 13.6 $ 0.03 Adj
Slide 30: Spending on capital
Spending on capital The Corporation defines spending on capital for each segment as property, plant and equipment and intangible asset expenditures on a cash basis adjusted to the accrual basis in order to account for assets that are available for use by the Corporation and the Moa Joint Venture pri
Slide 31: Spending on capital (continued)
Spending on capital (continued) $ millions, for the three months ended March 31 2023 Total Adjustment derived from Combined for Moa financial Metals Power Other(1) total Joint Venture statements Property, plant and equipment expenditures(2) $ 9.6 $ 0.7 $ -$ 10.3 $ (6.7) $ 3.6 Intangible asset expend
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