Sherritt International Corporation · TSX:S
Sherritt International — Q2 2021 Earnings Presentation
22 slides from Sherritt International's earnings presentation, Jul 30, 2021
Slide 1: Q2 Earnings Call
Q2 Earnings Call Review of Financial and Operational Results July 30, 2021
Slide 2: Participants
Participants Leon Binedell President & CEO Steve Wood Executive Vice President & COO Nathan Reeve Interim CFO
Slide 3: Forward-Looking Statements
Forward-Looking Statements This presentation contains certain forward-looking statements. Forward-looking statements repayments; uncertainty about the pace of technological advancements required in relation to the Corporation’s other documents filed with the Canadian securities authorities, includin
Slide 4: Q2 Highlights
Q2 Highlights 1. Adjusted EBITDA(1) growth of 114% 2. Strong finished nickel and cobalt production results at Moa JV 3. Robust nickel and cobalt prices and favourable market conditions 4. Financial results impacted by rise in input costs and workforce reduction and contractual benefits expenses 5. V
Slide 5: Review of operating results
Review of operating results 5
Slide 6: Commitment to ESG
Commitment to ESG Established a number of near-term and longer-term ESG targets Heath and Safety Achieve level A of TSM Safety & Health Protocol in all operations by 2024 Climate and Achieve net zero GHG emissions by 2050 Environment Obtain overall 15% of energy from renewable sources by 2030 Reduce
Slide 7: Moa JV highlights – Q2 Production
Moa JV highlights – Q2 Production Finished Nickel(1) (tonnes) Finished Cobalt(1) (tonnes) 4,230 476 4,147 425 Q2 2020 Q2 2021 Q2 2020 Q2 2021 • Growth driven by higher mixed sulphides availability • Increase due to higher cobalt to nickel ratio feed and improved refinery reliability • On track for g
Slide 8: Moa JV highlights – Costs
Moa JV highlights – Costs (1) Mining, Processing and Refining Costs (US$/lb) Net Direct Cash Cost(1) (US$/lb) $5.86 0.73 $4.78 $4.58 Other fixed 0.51 costs $3.92 0.71 Labour 1.28 0.81 Maintenance 0.47 0.95 Other variable costs 1.31 Sulphur 0.79 0.56 Fuel oil/ 1.39 electricity 0.71 Diesel 0.25 0.17 Q
Slide 9: Power highlights
Power highlights Electricity production (33⅓% GWh(1)) Unit operating costs(2)($/MWh(3)) 153 $21.03 115 $14.12 Q2 2020 Q2 2021 Q2 2020 Q2 2021 • Decline due to deferral of maintenance activities at • Higher unit costs driven by maintenance activities Boca de Jaruco to Q2 2021 and strengthened $CDN •
Slide 10: Financial Highlights
Financial Highlights sherritt
Slide 11: Change in Adjusted EBITDA
(1) Change in Adjusted EBITDA Higher MPR costs and G&A expenses impacted Q2 results 1. Non-GAAP measure – see MD&A for details 11
Slide 12: Distributions from the Moa Joint Venture
Distributions from the Moa Joint Venture $20M US$163M* Distributions (US$) $14M Distributed since Q1 2019 Quarterly distributions based on $20M available cash, prevailing metals prices, $14M $10M $9M $11M $10M and planned capital spend $5M $2.5M Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2019 2019 2019 2019 2020
Slide 13: Status of Cuban energy receivables
Status of Cuban energy receivables Received on Q1 2021 Expected/ receivables Q2 2021 US$M overdue due Received agreement overdue Oil & Gas - Trade receivables $ 27.5 $ 3.7 $ (5.2) $ – $ 26.0 Power Trade receivables/other $ 2.7 $14.8 $ (0.6) $ (16.9) $ – Energas CSA $124.0 $ 6.5 $ – $ (1.8) $128.7 To
Slide 14: Liquidity at June 30
Liquidity at June 30 $158M $154M Other $8.3M Other $4.1M Decrease driven by: Energas Energas $72M • $1.3M of bond repurchases $74M • $15M of interest payments on 2L notes • $2.9M of capital expenses • $11.7M operating cash outlfows excluding dividend receipts Canada Canada $77M Offset by: $76M • Moa
Slide 15: Outlook
Outlook 15
Slide 16: Putting recent developments in Cuba in perspective
Putting recent developments in Cuba in perspective 1 No disruption to operations 2 Impact of U.S. sanctions, spread of COVID-19, and lack of tourism have created challenging conditions 3 Cuba has developed 5 vaccines – 2 approved and being administered 4 22% of Cuban population is fully vaccinated*
Slide 17: Outlook for nickel demand is strong
Outlook for nickel demand is strong 4,735 4,392 3.5% 3,862 3,173 3,265 Thousands of tonnes 3,045 2,937 2,774 2,398 Compounded annual growth rate 2020 2021 2022 2023 2024 2025 2030 2035 2040 Accelerated adoption of electric vehicles will drive increased demand Source: Wood Mackenzie, June 2021 17
Slide 18: Nickel and cobalt prices since start of Q2
Nickel and cobalt prices since start of Q2 30% 25% US$8.97 Nickel +22% 20% 15% 10% US$7.30 Cobalt +9% 5% US$24.85 0% (5%) US$22.75 (10%) (15%) (20%) 2-Jun 9-Jun 7-Jul 31-Mar 5-May 7-Apr 14-Apr 21-Apr 28-Apr 16-Jun 23-Jun 30-Jun 14-Jul 21-Jul 28-Jul 12-May 19-May 26-May Strong prices anticipated thro
Slide 19: Technologies as an incubator and provider of solutions
Technologies as an incubator and provider of solutions Commercialize research projects Create incremental value Miner/ Sherritt Oil Co. Funding Moa JV/ Licensing/sales of Sherritt partner Delivery of services Corefco solutions Technologies EPCM Trader Co. Model provides multiple paths to growth and
Slide 20: Summary
Summary • Q2 results indicative of strong nickel and cobalt prices • Collections of overdue receivables will be variable • Q3 production to be impacted by planned shutdowns at Moa and the refinery • No changes to 2021 guidance • Transition of Technologies Group is accelerating • Market outlook is fa
Slide 21: Q&A Discussion
Q&A Discussion sherritt
Slide 22: Sherritt International Corporation contact details
Sherritt International Corporation 22 Adelaide West, 42nd Floor Toronto, Ontario, Canada M5H 4E3 Joe Racanelli, Director, Investor Relations Telephone: (416) 935 -2457 I Toll -Free: 1 (800) 704 -6698 Email: joe.racanelli@sherritt.com I Website: www.sherritt.com
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