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Mike RobinsThanks Paula. Let me start off with some highlights. Overall our earnings were $32.3 million or $0.11 a share. And this had an impact to some non-operational expense items and as a result does not reflect the fact that it was frankly a decent quarter operationally. I will get to those non-operational items shortly. But to finish the highlights of our headline number, on a quarter-over-quarter basis revenue is not materially different. The softening of the nickel prices largely offset by the strength of the pricing in oil and our sales volume were quite steady. So in the aggregate our operating cash flows remain quite strong at over $120 million and that was higher than the first quarter of 2011 by $15 million. And that was due to some improvements in our working capital. Now let me drill down into some of the changes over our last year particularly the non-operational changes. A big part of the earnings reduction was related to higher net financing expense, which was mainly non-operational. This caused a $27 million reduction in earnings when compared to last year and only $3 million of that an increase in interest expense. The biggest driver with an $11.8 million loss on an option that we have to acquire half of SNC's 5% equity interest in Ambatovy. This is a non-cash item and it's all based on Black-Scholes calculations and is subject to a myriad of assumption including volatility, cash flow estimates, interest rate projections and timing. On the adoption of IFRS, we recognized the theoretical value of the option and have updated for changes in the assumption each quarter. In fact we recognized a gain in the first quarter of 2011 and as late as last quarter. But due to major changes, the impact of volatility on the model, the value dropped from $37 million at the end of the year down to $25.6 million and that's almost $0.05 a share.
And I was saying earlier our EPS does not reflect the operational reality of the quarter. If we adjusted EPS for just as one non-operational item, EPS would have been $0.16. Now we expect that the value of this option will be steadily declining at a rate of about $2 million a quarter, we get closer to the expiration date. So you should take that into consideration.Now let’s talk about the operations of the business. I will talk a little bit about sales volume first. They were stable for the quarter except for one large difference in volume in our fertilizer sales. While they have benefited from a beautiful early spring in Alberta and as a result of that the shipments of fertilizers began earlier than usual. And on top of that, we also received significant advance payment for fertilizer shipments that we expect to get in the second quarter. Our growth production from oil properties were down only slightly because we had two rigs coming on line during the quarter. Our sales volume in the mine metals business in the Prairie organization was down by about 5% from the previous quarter, since one of our customers was down during middle of the quarter. However production is back to capacity again. Now sales in our export coal business would have been right on target had it not been for the congestion at the port at the end of the quarter. We had a ship that was carrying about 200,000 tons and this delay dropped our revenues by close to $20 million for the quarter. Now the ship did sail during the second quarter and rail and port congestion is an issue facing all the Canadian bulk shippers and it is a focus for coal management. Read the rest of this transcript for free on seekingalpha.com