Sherritt International Corporation · TSX:S
Sherritt International — FY2014 Earnings Presentation
21 slides from Sherritt International's earnings presentation, Feb 12, 2015
Slide 1: Q4 and Full Year 2014 Results
Q4 AND FULL YEAR 2014 RESULTS February 12, 2015
Slide 2: Cautionary Statement on Forward-Looking Information
CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION This document contains certain forward-looking statements. Forward-looking statements can generally be identified by the use of statements that include such words as “believe”, “expect”, “anticipate”, “intend”, “plan”, “forecast”, “likely”, “may”,
Slide 3: David Pathe, President and CEO
David Pathe, President and CEO
Slide 4: Significant Operational and Financial Achievements in 2014
SIGNIFICANT OPERATIONAL AND FINANCIAL ACHIEVEMENTS IN 2014 2014 OPERATIONAL AND FINANCIAL HIGHLIGHTS FULL YEAR OPERATIONAL RESULTS • Record nickel production increased by 17% (1) • Ambatovy nickel mine achieved guidance, successful ramp-up continues • Extended Cuban Oil and Gas business production p
Slide 5: Ambatovy: Continued Production Increases Will Lead to Cash Flow
AMBATOVY: CONTINUED PRODUCTION INCREASES WILL LEAD TO CASH FLOW Ambatovy Finished Nickel Production (tonnes) Q4 HIGHLIGHTS (1): +47% • Record PAL throughput of 74% vs 66% in Q3 14,821 • Nickel production increased 47% in the fourth quarter compared to the prior year 10,059 • Solved technical issues
Slide 6: Second Ore Thickener to Contribute to Higher Throughput
SECOND ORE THICKENER TO CONTRIBUTE TO HIGHER THROUGHPUT Commissioning commenced during Q4 6
Slide 7: Ambatovy Low Cost Nickel Production
AMBATOVY LOW COST NICKEL PRODUCTION Targeted C1 Costs (US$/lb) $12 • At 2015 guidance levels of 47,000- $10 52,000 tonnes annually, Ambatovy’s cash costs are expected to be $4 - $6 $8 $6 - $8 per pound of nickel $6 • Attractive cash flow and profitability $4 - $6 $4 $3 - $5 profile • Long life asset
Slide 8: Moa: Consistent and Profitable
MOA: CONSISTENT AND PROFITABLE Q4 HIGHLIGHTS: • Consistent finished nickel production • Cash costs were lower than a year ago due to lower mining and processing costs and higher by-product credits • Strong contributor to overall Adjusted EBITDA • Celebrated 20th anniversary of joint venture operatio
Slide 9: Nickel Forecasted to Enter Supply/Demand Deficit Position in 2015
NICKEL FORECASTED TO ENTER INTO SUPPLY/DEMAND DEFICIT POSITION IN 2015 NICKEL MARKET SYNOPSIS World Supply/Demand 2014-2019 • Nickel prices were under pressure 2,400 as LME inventories increased, fueled by strong supply and 2,300 destocking from China. The 2,200 strengthening of the U.S. dollar in t
Slide 10: Oil and Gas: Extending Production Profile
OIL AND GAS: EXTENDING PRODUCTION PROFILE Q4 HIGHLIGHTS: • Signed two new Production-Sharing Contracts (PSCs) with 25 year terms • Awaiting approval for two additional exploration PSCs • Production decreased 5% to 18,701 bopd, due to the production loss at Yumuri • Unit operating costs increased to
Slide 11: Power: Increased EBITDA Contribution
POWER: INCREASED EBITDA CONTRIBUTION Q4 HIGHLIGHTS: • Electricity generation increased 47% in Q4 and 44% for the year due to successful start-up of Boca de Jaruco Combined Cycle Project • Increasingly strong contribution to Adjusted EBITDA and cash flow • Operating costs decreased 10% in Q4 and decr
Slide 12: Dean Chambers, EVP & CFO
CATERPILLAR Dean Chambers, EVP & CFO
Slide 13: Strengthening Our Financial Position
STRENGTHENING OUR FINANCIAL POSITION 2014 Financial Results Summary (1)(2) – from Continuing Operations Adjusted Operating Cash Adjusted Earnings (Loss) from Combined Revenue Adjusted EBITDA Flow/Share Continuing Operations/Share $1,136 $253 $217 $783 $0.25 $0.16 $278 $189 $43 $31 Q4 2013 Q4 2014 Q4
Slide 14: Change in Net Loss from Continuing Operations Between Q4 and Q3 2014
CHANGE IN NET LOSS FROM CONTINUING OPERATIONS BETWEEN Q4 2014 AND Q3 2014 50 ($51.3) ($147.7) ($80.0) 0 ($21.4) -50 +$11.1 ($15.6) ($6.3) +$67.7 ($33.6) $ millions -100 ($15.9) ($8.5) ($12.8) +$6.6 -150 -200 Q3 net loss from Lower Oil & Gas Lower Oil & Gas Higher loss at Lower earnings Debenture Oil
Slide 15: David Pathe, President and CEO
David Pathe, President and CEO
Slide 16: 2014 Accomplishments
2014 ACCOMPLISHMENTS FOCUSING ON OUR CORE NICKEL BUSINESS BUILDING BALANCE SHEET STRENGTH • Completed the sale of the Coal • Reduced debt by $790M business • Established normal course issuer bid CONTINUING TO RAMP-UP AT AMBATOVY REDUCING COSTS • Ambatovy achieves guidance • Cost savings from salarie
Slide 17: 2015 Outlook
2015 OUTLOOK Production Outlook • Finished nickel production +18% (1) > Forecast significant increase at Ambatovy • Oil and Gas GWI production to increase +3% • Power generation forecasted to remain level 2014 Actual Projected 2015 Production volumes (tonnes) Mixed sulphides (tonnes, Ni+Co contained
Slide 18: 2015 Outlook
2015 OUTLOOK Capital Expenditures • Metals capital increase of $39 million > Sustaining capital increase of $17 million for mining equipment at Moa and Fort Saskatchewan refinery maintenance > Growth capital of $20 million towards third acid plant at Moa • Oil and Gas capital increase of $42 million
Slide 19: 2015 Objectives: Executing Against Our Strategic Priorities
2015 OBJECTIVES: EXECUTING AGAINST OUR STRATEGIC PRIORITIES FOCUSING ON OUR CORE NICKEL BUSINESS • Sustaining production and lowering costs at Moa • Successful progression of the acid plant project at Moa CONTINUING TO RAMP-UP AT AMBATOVY • Targeting a production rate of 90% of nameplate capacity ov
Slide 20: Questions and Answers
Questions and Answers
Slide 21: Sherritt International Corporation
Sherritt International Corporation 1133 Yonge Street, Toronto, Ontario, Canada M4T 2Y7 Media & Investor Relations Sean McCaughan Telephone: 416.935.2451 Toll-Free: 1.800.704.6698 Email: investor@sherritt.com Website: www.sherritt.com 21
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