Sherritt International Corporation · TSX:S
Sherritt International — Q3 2024 Earnings Presentation
35 slides from Sherritt International's earnings presentation, Oct 31, 2024
Slide 1: Q3 2024 Conference Call
Sherritt International Corporation Q3 2024 Conference Call Review of Financial and Operational Results October 31, 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 dividends; the risk to Sherritt’s entitlements to future distributions (including pursuant to the production and completion; and securing regulatory and government approvals. There ca
Slide 4: Nickel Price Third Quarter 2024 Developments
Nickel Price Third Quarter 2024 Developments Nickel Reference Price(1) Third Quarter 2024 Key Market Developments US$10.00 Q3 2024 → Average nickel reference price decreased 12% quarter-over- quarter with prices reaching the low of the year on July 25 US$8.00 → July 11 - BHP announces plans to suspe
Slide 5: Third Quarter 2024 Highlights
Third Quarter 2024 Highlights → Strong production of finished nickel, cobalt and fertilizer → NDCC(1) decreased to US$5.16/lb driven by a 19% year-over-year decrease in MPR/lb(2) → Highest electricity volume in 9 years, 21% increase year-over-year → Higher unit operating costs on planned maintenance
Slide 6: Multi Year Best Performance in Power Production and NDCC
Third Quarter 2024 (1) Multi Year Best Performance in Power Production and NDCC MSP(1) Production Nickel Production Net Direct Cash Cost(2) Power Division Electricity Production Available Liquidity in Canada Higher Q/Q Throughout 2024 Higher Q/Q Throughout 2024 Lowest in 2 Years Highest in 9 Years H
Slide 7: Review of Operations
Review of Operations Fort Saskatchewan, Canada 7
Slide 8: Metals Third Quarter Highlights
Metals Third Quarter Highlights Production volume Q3 2024 Q3 2023 (tonnes)(1) Mixed sulphides Mixed Sulphides 4,148 4,037 → Strong mixed sulphides production benefiting from the new Slurry Preparation Plant Finished Nickel 4,333 3,841 Finished Cobalt 454 410 Finished nickel and cobalt → Higher mixed
Slide 9: Metals Third Quarter Net Direct Cash Costs (NDCC)
Metals Third Quarter Net Direct Cash Costs (NDCC)(1) Third Quarter 2024 Results Year –Over-Year Change NDCC(1) (US$/lb of nickel sold) Mining, processing and refining(2) 29% Decrease YoY → 19% lower MPR/lb costs due to: → Operating efficiencies on better ore feed → Lower input commodity prices, main
Slide 10: Moa JV Expansion Update
Moa JV Expansion Update Phase Two: Processing Plant → Piping installation continuing, brick lining of vessels started → Moa JV finalized and began utilizing US$12M of foreign currency financing from a Cuban bank to support international payments related to construction of the Sixth Leach Train → Ram
Slide 11: Power Third Quarter Results
Power Third Quarter Results Electricity production → Highest electricity production in 9 years and an increase of 21% year-over-year on improved equipment availability Operating Results Q3 2024 Q3 2023 Unit operating cost(1) Electricity Production and → Higher unit cost driven by timing of planned m
Slide 12: Financial Highlights
Financial Highlights Fort Saskatchewan, Alberta 12
Slide 13: Financial Performance Third Quarter Results
Financial Performance Third Quarter Results Financial performance key drivers: Financial Results → Lower average-realized prices for nickel and cobalt(1) Q3 2024 Q3 2023 ($ millions) → Nickel 19% Revenue(2) 32.9 36.4 → Cobalt 30% → Fertilizers 12% Combined revenue(1)(3) 126.4 128.0 → Nickel sales
Slide 14: Available Liquidity in Canada Third Quarter Update
Available Liquidity in Canada Third Quarter Update $41.0M Third Quarter changes include → Fort Site operating cash inflow of $35.9M, including strong fertilizer sales and $71.4M pre-sales Available → Receipts from nickel put options $3.4M Liquidity in Canada → Dividend distribution from Energas $0.9
Slide 15: Financial Highlights Additional Third Quarter Updates
Financial Highlights Additional Third Quarter Updates → Management focusing efforts to maximize cash flows from sales of available inventories to maximize the amount to be received in Q4 Cobalt Swap targeting up to the previously guided $50 million (Sherritt’s share and GNC(1) redirected share combi
Slide 16: Summary
Summary Fort Saskatchewan, Alberta 16
Slide 17: Third Quarter 2024 Summary
Third Quarter 2024 Summary → Strong operational performance at Metals including MSP, finished nickel and cobalt production, sales volumes and NDCC(1) → Growth and strategic development programs on track → Cobalt Swap distributions expected in Q4 2024 → Power continues to achieve higher electricity p
Slide 18: Q&A Discussion
Q&A Discussion sherritt
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 416.935.2451 ER 2024 | Toll -Free: 1.800.704.6698 Email: investor@sherritt.com SHERRITT.COM • TSX: S
Slide 20: Appendix: Estimates and Non-GAAP and other financial measures
APPENDIX Estimates and Non-GAAP and other financial measures 20
Slide 21: Forward-Looking Estimates
Forward-Looking Estimates 2024 Cobalt Swap distributions For 2024, Sherritt continues to expect distributions under the Cobalt Swap agreement in the fourth quarter of the year. The Moa JV’s cash and cobalt distributions to the Corporation are determined based on available cash in excess of liquidity
Slide 22: Appendix: Non-GAAP and other financial measures
APPENDIX Non-GAAP and other financial measures 22
Slide 23: 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 24: 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 25: Adjusted EBITDA (continued)
Adjusted EBITDA (continued) 2023 $ millions, for the three months ended September 30 (Restated) Adjustment Corporate for Moa Oil and and Joint Metals(1) Power Gas Other Venture Total (Loss) earnings from operations and joint venture per financial statements $ (14.9) $ 5.6 $ (7.0) $ (7.9) $ 0.4 $ (23
Slide 26: Adjusted EBITDA (continued)
Adjusted EBITDA (continued) 2023 $ millions, for the nine months ended September 30 (Restated) Adjustment Corporate for Moa Oil and and Joint Metals(2) Power Gas Other Venture Total Earnings (loss) from operations and joint venture per financial statements $ 19.9 $ 14.8 $ (6.9) $ (26.5) $ (1.3) $ -
Slide 27: 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 28: Average-realized price (continued)
Average-realized price (continued) $ millions, except average-realized price and sales volume, for the three months ended September 30 2023 Metals Adjustment for Moa Joint Nickel Cobalt Fertilizer Power Other(1) Venture Total Revenue per financial statements $ 78.6 $ 20.4 $ 8.3 $ 11.9 $ 13.2 $ (96.0
Slide 29: Average-realized price (continued)
Average-realized price (continued) $ millions, except average-realized price and sales volume, for the nine months ended September 30 2023 Metals Adjustment for Moa Joint Nickel Cobalt Fertilizer Power Other(1) Venture Total Revenue per financial statements $ 295.5 $ 89.6 $ 70.2 $ 33.1 $ 34.6 $ (334
Slide 30: 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 31: 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 September 30 2023 Adjustment for Moa Metals Power Other(1) Joint Venture Total Cost of sales per financial statements $ 128.1 $ 5.7 $ 15.1 $ (98.9) $ 50.0 Less: Depletion, d
Slide 32: 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 nine months ended September 30 2023 Adjustment for Moa Metals Power Other(1) Joint Venture Total Cost of sales per financial statements $ 454.8 $ 15.6 $ 29.2 $ (294.2) $ 205.4 Less: Depletion,
Slide 33: Adjusted net earnings/loss from continuing operations 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 34: 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 September 30 $ millions $/share $ millions $/share Net earnings (loss) from continuing operations $ 1.8 $ 0.00 $ (24.8) $ (0.06)
Slide 35: 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 nine months ended September 30 $ millions $/share $ millions $/share Net loss from continuing operations $ (50.6) $ (0.13) $ (10.9) $ (0.03) Adjusti
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