Sherritt Reports Third Quarter 2024 Results; Strong Operational
Sherritt International Corporation 1
NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE
SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
Sherritt Reports Third Quarter 2024 Results; Strong Operational
Performance at Metals with Significant Improvements to Net Direct Cash
Costs; Increased Available Liquidity in Canada
TORONTO – October 30, 2024 – Sherritt International Corporation (“Sherritt”, the “Corporation”) (TSX: S), a world leader in
using hydrometallurgical processes to mine and refine nickel and cobalt – metals deemed critical for the energy transition –
today reported its financial results for the three and nine months ended September 30, 2024. All amounts are in Canadian dollars
unless otherwise noted.
Leon Binedell, President and CEO of Sherritt commented, “Our Metals division has achieved remarkable progress, with finished
nickel production reaching its highest quarterly level in two years. We have successfully reduced our net direct cash costs t o
US$5.16 per pound, demonstrating a significant year-over-year improvement even with materially lower cobalt by-product prices.
Our Power division has also excelled, recording the highest quarterly electricity production in nine years. Additionally, we
completed work to bring another gas turbine online, enabling us to generate electricity from new gas wells, including a new well
that began production in October. This will further increase production and allow us to realize higher distributions of dividends in
Canada going forward.”
Mr. Binedell continued, “Despite this quarter’s lower nickel and cobalt prices, our available liquidity in Canada increased 27% to
$71 million. We are beginning to realize savings from the cost reduction initiatives announced in the first half of the year and we
made additional workforce reductions in the third quarter to lower our costs further. During the fourth quarter, we expect to
receive another significant distribution from Power and the recommencement of dividends from the Cobalt Swap agreement.
Looking ahead, phase two of our expansion at the Moa JV is advancing as planned, with commissioning and ramp-up scheduled
for the first half of next year which will increase our mixed sulphide production to our refinery, displacing lower-margin third-party
feed and maximizing our profitability.”
THIRD QUARTER 2024 SELECTED DEVELOPMENTS
• Sherritt’s share(1) of finished nickel and cobalt production at the Moa Joint Venture (“Moa JV”) was 4,333 tonnes and
454 tonnes, respectively.
• Sherritt’s share of finished nickel and cobalt sales was 3,538 tonnes and 421 tonnes, respectively. Sales volumes were
below production, consistent with Q3 2023, primarily due to the third quarter typically being a seasonally softer quarter
for sales due to summer shutdowns of steel mills and some customers deferring sales to the fourth quarter. In addition,
the Canadian rail lock-out, which although resolved quickly, temporarily disrupted logistics deferring some sales which
otherwise would have occurred during the quarter. Sherritt expects stronger demand from customers in the fourth
quarter.
• Net direct cash cost (“NDCC”)(2) was US$5.16/lb benefiting from a 19% year-over-year improvement in mining,
processing and refining costs per pound of nickel sold (“MPR/lb”), the largest component of NDCC(2).
• Electricity production was 230 GWh which was the highest quarterly electricity production in nine years and reflects
Sherritt’s multiyear efforts to maximize value and increase dividends in Canada from its Power division by bringing new
gas wells into production, improving equipment availability and increasing utilization rates.
• Electricity unit operating cost(2) was $44.95/MWh reflecting timing of planned maintenance which was completed during
the quarter, partly offset by higher sales volume.
• 2024 guidance for Metals and Power production volumes, NDCC(1), electricity unit operating costs(1) and spending on
capital(1) remain unchanged.
• Sherritt continues to realize savings in line with its estimated $15.0 million in annual savings from the workforce
reductions announced in the first half of 2024. During the quarter, Sherritt made further reductions to streamline its
organizational structure which are expected to result in approximately $2.2 million of additional annualized savings.
• Net earnings from continuing operations were $1.8 million, or nil per share.
2024 Third Quarter Report
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2 Sherritt International Corporation
• Adjusted net loss from continuing operations(2) was $11.5 million or $(0.03) per share, which primarily excludes a non-
cash $11.5 million revaluation gain on the net receivable pursuant to the Cobalt Swap(3) on updates to valuation
assumptions.
• Adjusted EBITDA(2) was $10.5 million.
• Available liquidity in Canada as at September 30, 2024 was $71.4 million supported by $35.9 million of proceeds from
operating activities for Fort Site which included strong receipts on fertilizer sales and presales, $3.4 million on settlement
of in-the-money nickel put options and $0.9 million of dividends from Energas. These receipts were partly offset
primarily by $10.8 million used in Power to support planned maintenance activities and $5.4 million in payments on
contractually obligated rehabilitation and closure costs related to legacy Oil and Gas assets in Spain.
• Phase two of the Moa JV expansion is continuing to advance with commissioning and ramp up expected in the first half
of 2025. The Moa JV finalized and began utilizing its US$12.0 million of foreign currency financing from a Cuban bank
to support international payments related to construction of the Sixth Leach Train, the primary component of phase two
of the expansion project.
• Advanced engineering and process flowsheet development to enhance and derisk the flowsheet on the mixed
hydroxide precipitate (“MHP”) processing project (“MHP Project”) which already yielded positive results for metal
recoveries and impurity removals and continued external engagement with governments, potential customers and
funding partners.
(1) References to “Sherritt’s share” is consistent with the Corporation’s definition of reportable segments for financial statement purposes. Sherritt’s share of “Metals”
includes the Corporation’s 50% interest in the Moa JV, its 100% interest in the utility and fertilizer operations in Fort Saskatchewan (“Fort Site”) and its 100% interests
in subsidiaries established to buy, market and sell certain of the Moa JV’s nickel and cobalt production and the Corporation’s cobalt inventory received under the
Cobalt Swap agreement (“Metals Marketing”). Sherritt’s share of Power includes the Corporation’s 33⅓% interest in Energas S.A. (“Energas”). References to Corporate
and Other and Oil and Gas includes the Corporation’s 100% interest in these businesses. Corporate and Other refers to the Corporate office and Technologies.
References to Fort Site directly is to the Corporation’s 100% interest in the utility and fertilizer operations.
(2) Non-GAAP financial measures. For additional information see the Non-GAAP and other financial measures section of this press release.
(3) For additional information on the Cobalt Swap, see Note 12 – Advances, loans receivable and other financial assets of the consolidated financial statements for the
year ended December 31, 2023.
DEVELOPMENTS SUBSEQUENT TO THE QUARTER
Subsequent to the quarter end:
• Received an additional $1.6 million in cash on settlement of nickel put options.
• Paid $9.4 million in interest on its Second Lien Notes.
• On October 18, 2024, Cuba experienced a nationwide power outage and following which the Moa nickel mine began
operating at a reduced capacity of 50% to 60% with power sourced from the mine site’s own power generating
capabilities. The Moa nickel mine and all Energas facilities returned to full operating capacity on October 27, 2024 with
Energas playing an instrumental role in assisting to restore power to the Cuban national grid. Despite the power outage
and adverse weather from a tropical storm that occurred shortly after, there was not a material impact to mixed
sulphides production. Moreover, the Corporation’s refinery in Alberta strategically built-up feed inventory earlier in the
year, ensuring reliable feed throughput for finished nickel production. As a result, Sherritt maintains its 2024 production
and unit operating cost guidance ranges.
Sherritt International Corporation 3
Q3 2024 FINANCIAL HIGHLIGHTS
For the three months ended For the nine months ended
2024 2023 2024 2023
$ millions, except per share amount September 30 September 30 Change September 30 September 30 Change
Revenue $ 32.9 $ 36.4 (10%) $ 113.1 $ 188.5 (40%)
Combined revenue(1) 126.4 128.0 (1%) 417.3 512.4 (19%)
(Loss) earnings from operations and joint venture (2.3) (23.8) 90% (26.6) - -
Net earnings (loss) from continuing operations 1.8 (24.8) 107% (50.6) (10.9) (364%)
Net earnings (loss) for the period 2.1 (24.8) 108% (49.9) (11.2) (346%)
Adjusted EBITDA(1) 10.5 (2.2) 577% 17.0 53.2 (68%)
Adjusted loss from continuing operations(1) (11.5) (12.1) 5% (46.1) (0.8) nm(2)
Net earnings (loss) from continuing operations ($ per share) 0.00 (0.06) 100% (0.13) (0.03) (333%)
Adjusted net (loss) earnings from continuing operations
($ per share)(1) (0.03) (0.03) - (0.12) - -
Cash provided (used) by continuing operations for operating
activities 20.4 4.4 364% (4.4) 46.3 (110%)
Combined free cash flow(1) 10.2 (11.7) 187% (1.0) 23.2 (104%)
Average exchange rate (CAD/US$) 1.366 1.341 2% 1.362 1.346 1%
(1) Non-GAAP financial measures. For additional information see the Non-GAAP and other financial measures section of this press release.
(2) Not meaningful (“nm”).
2024 2023
$ millions, as at September 30 December 31 Change
Cash and cash equivalents
Canada $ 41.0 $ 21.5 91%
Cuba(1) 106.0 96.3 10%
Other 1.6 1.3 23%
148.6 119.1 25%
Loans and borrowings 371.1 355.6 4%
The Corporation's share of cash and cash equivalents in the Moa Joint Venture,
not included in the above balances: $ 2.3 $ 5.9 (60%)
(1) As at September 30, 2024, $104.2 million of the Corporation’s cash and cash equivalents was held by Energas (December 31, 2023 - $93.9 million).
Cash and cash equivalents as at September 30, 2024 were $148.6 million, increasing from $132.3 million as at June 30, 2024.
As at September 30, 2024, total available liquidity in Canada, which is composed of cash and cash equivalents in Canada of
$41.0 million and available credit facilities of $30.4 million was $71.4 million increasing from $55.9 million as at June 30, 2024.
Available liquidity in Canada was supported by $35.9 million of proceeds from operating activities for Fort Site which included
strong receipts on fertilizer sales and presales, $3.4 million on the settlement of in-the-money nickel put options and $0.9 million
of dividends from Energas . These receipts were partly offset primarily by $1 0.8 million used in Power to support planned
maintenance activities and $5.4 million in payment on contractually obligated rehabilitation and closure costs related to legacy
Oil and Gas assets in Spain.
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 requirements.
Determinants of liquidity include anticipated nickel and cobalt prices and sales volumes, planned spending on capital at the Moa
JV including growth capital, working capital needs, expected financing and other expected liquidity requirements. Available cash
is also impacted by changes in working capital primarily related to changes in inventory, and timing of receipts and payments ,
including receipts on nickel and cobalt sales subsequent to shipment.
In Sherritt’s second quarter results, the Corporation indicated approximately $50.0 million was expected to be received durin g
the fourth quarter from the Cobalt Swap agreement (including both Sherritt’s share and GNC’s (2) redirected share), which was
based on the midpoint of the Moa JV’s 2024 guidance ranges for production volumes, unit operating costs (1) and spending on
capital(1) as disclosed in the Outlook section of the MD&A, and the first half 2024 nickel and cobalt average reference prices of
US$8.00/lb and US$13.50/lb, respectively.
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4 Sherritt International Corporation
With the third quarter average reference prices of both nickel and cobalt being below the first half 2024 average reference prices,
management is focusing efforts to maximize cash flows from sales of available inventories and maximize the amount to be
received in the fourth quarter under the Cobalt Swap up to the $50.0 million (including both Sherritt’s share and GNC’s redirected
share) that was previously indicated. Refer to the risks related to Sherritt’s corporate structure in the Corporation’s 2023 Annual
Information Form for further information on risks related to distributions from the Moa JV.
Given its strong operating performance during 2024, Energas generated sufficient liquidity to distribute to Sherritt dividends in
Canada of $0.9 million and $6.0 million in the three and nine months ended September 30, 2024, respectively . Based on 2024
guidance estimates for production volumes, unit operating costs(1) and spending on capital(1) disclosed in the Outlook section of
the MD&A, Sherritt continues to expect total dividends in Canada from Energas of approximately $10.0 million in 2024. Refer to
the risks related to Sherritt’s corporate structure in the Corporation’s 2023 Annual Information Form for further information on
risks related to dividends in Canada from Energas.
During Q3 2024, the Moa JV finalized and began utilizing its US$12.0 million of foreign currency financing from a Cuban bank
to support international payments related to construction of the Sixth Leach Train, the primary component of phase two of the
expansion project.
As at September 30, 2024, the Corporation was in compliance with all its debt covenants.
Subsequent to the quarter end, Sherritt received an additional $1.6 million in cash on settlement of nickel put options and paid
$9.4 million in interest on its Second Lien Notes. At the interest payment date, the Corporation was not required to make a
mandatory redemption of Second Lien Notes as it did not have Excess Cash Flow as defined in the Second Lien Notes indenture
agreement for the two-quarter period ended June 30, 2024.
(1) Non-GAAP financial measures. For additional information see the Non-GAAP and other financial measures section of this press release.
(2) General Nickel Company S.A. (“GNC”).
Sherritt International Corporation 5
REVIEW OF OPERATIONS
Metals
For the three months ended For the nine months ended
2024 2023 2024 2023
$ millions (Sherritt's share), except as otherwise noted September 30 September 30 Change September 30 September 30 Change
FINANCIAL HIGHLIGHTS(1)
Revenue $ 112.6 $ 115.7 (3%) $ 378.3 $ 477.8 (21%)
Cost of sales 110.1 128.1 (14%) 385.7 454.8 (15%)
Earnings (loss )from operations 0.8 (14.9) 105% (17.5) 19.9 (188%)
Adjusted EBITDA(2) 14.9 (0.8) nm(5) 25.4 62.3 (59%)
CASH FLOW(1)
Cash provided by continuing operations for operating
activities(2) $ 34.8 $ 10.7 225% $ 87.2 $ 112.5 (22%)
Free cash flow(2) 24.2 (3.0) 907% 59.4 73.1 (19%)
PRODUCTION VOLUMES (tonnes)
Mixed Sulphides 4,148 4,037 3% 12,295 11,570 6%
Finished Nickel 4,333 3,841 13% 11,313 10,592 7%
Finished Cobalt 454 410 11% 1,138 1,108 3%
Fertilizer 65,205 48,400 35% 182,624 158,615 15%
NICKEL RECOVERY(3) (%) 85% 88% (3%) 87% 87% -
SALES VOLUMES (tonnes)
Finished Nickel 3,538 2,845 24% 11,352 9,377 21%
Finished Cobalt 421 526 (20%) 1,173 2,321 (49%)
Fertilizer 31,245 21,389 46% 115,836 114,652 1%
AVERAGE-REFERENCE PRICE(4) (US$ per pound)
Nickel $ 7.37 $ 9.23 (20%) $ 7.74 $ 10.34 (25%)
Cobalt 12.25 16.58 (26%) 13.16 16.50 (20%)
AVERAGE-REALIZED PRICE(2) (CAD)
Nickel ($ per pound) $ 10.11 $ 12.54 (19%) $ 10.41 $ 14.29 (27%)
Cobalt ($ per pound) 12.42 17.64 (30%) 13.70 17.51 (22%)
Fertilizer ($ per tonne) 434.58 389.43 12% 503.33 612.73 (18%)
UNIT OPERATING COST(2) (US$)
Nickel - net direct cash cost (US$ per pound) $ 5.16 $ 7.24 (29%) $ 6.10 $ 6.97 (12%)
SPENDING ON CAPITAL(2)(CAD)
Sustaining $ 7.5 $ 12.8 (41%) $ 22.3 $ 32.3 (31%)
Growth 3.7 2.9 28% 6.1 9.1 (33%)
$ 11.2 $ 15.7 (29%) $ 28.4 $ 41.4 (31%)
(1) The Financial Highlights, and cash flow amounts for Metals combine the operations of the Moa JV, Fort Site and Metals Marketing. Breakdowns of revenue, Adjusted
EBITDA, and the components of free cash flow (cash provided (used) by continuing operations for operating activities and Property, plant and equipment expenditures)
for each of these operations are included in the Combined Revenue, Adjusted EBITDA and Free cash flow reconciliations, respectively, in the Non-GAAP and other
financial measures section of this press release.
(2) Non-GAAP financial measures. For additional information see the Non-GAAP and other financial measures section of this press release.
(3) The nickel recovery rate measures the amount of finished nickel that is produced compared to the original nickel content of the ore that was mined.
(4) Reference sources: Nickel – London Metal Exchange (“LME”). Cobalt - Average standard-grade cobalt price published per Argus.
(5) Not meaningful (“nm”).
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6 Sherritt International Corporation
Revenue
Metals revenue in Q3 2024 was $112.6 million compared to $115.7 million in Q3 2023.
Nickel revenue in Q3 2024 was $78.8 million compared to $78.6 million in Q3 2023. In Q3 2024, the 24% increase in nickel
sales volume was offset by a 19% lower average-realized price(1). In Q3 2024, sales volumes were below production, consistent
with Q3 2023, primarily due to the third quarter typically being a seasonally softer quarter for sales due to summer shutdowns
of steel mills and some customers deferring sales to the fourth quarter. In addition, the Canadian rail lock-out, which although
resolved quickly, temporarily disrupted logistics deferring some sales which otherwise would have occurred during the quarter.
Sherritt expects stronger demand from customers in the fourth quarter.
Cobalt revenue in Q3 2024 was $11.5 million compared to $20.4 million in Q3 2023. Lower revenue in Q3 2024 was primarily
due to the timing of receipts and sales of cobalt by Sherritt under the Cobalt Swap agreement and lower average-realized
prices(1). The average-realized prices(1) for cobalt were 30% lower in Q3 2024 compared to Q3 2023. For more information
regarding the timing of Cobalt Swap distributions in 2024, refer to the Cobalt Swap sales section below.
Fertilizer revenue in Q3 2024 was $13.6 million compared to $8.3 million in Q3 2023. Fertilizer sales volumes were 46% higher
compared to Q3 2023, reflecting timing of fall season sales and higher available production for sale. In addition, average-realized
prices(1) for fertilizers were 12% higher in Q3 2024 compared to Q3 2023.
Cobalt Swap sales
To date in 2024, as expected, Sherritt has not received cobalt distributions under the Cobalt Swap. In 2023, Sherritt had received
100% of the annual maximum amount of cobalt (2,082 tonnes) and had sold approximately 97% of that cobalt by the end of the
third quarter of the year.
While the timing of receipts and sales of cobalt under the Cobalt Swap results in variances in cobalt sales volumes, revenue and
cost of sales for Sherritt, they do not have a material impact on earnings from operations, average-realized prices(1), cobalt by-
product credits, or NDCC(1) as the variance in revenue and costs of Sherritt’s share of cobalt under the Cobalt Swap is offset by
Sherritt’s share of revenue and costs of the Moa JV and the cost of cobalt sold on volumes of cobalt redirected from GNC is
determined based on the in-kind value of cobalt calculated as the cobalt reference price from the month preceding distribution
less a mutually agreed selling cost adjustment.
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 requirements.
Determinants of liquidity include anticipated nickel and cobalt prices and sales volumes, planned spending on capital at the Moa
JV including growth capital, working capital needs, expected financing and other expected liquidity requirements. Available cash
is also impacted by changes in working capital primarily related to changes in inventory, and timing of receipts and payments,
including receipts on nickel and cobalt sales subsequent to shipment.
In Sherritt’s second quarter results, the Corporation indicated approximately $50.0 million was expected to be received during
the fourth quarter from the Cobalt Swap agreement (including both Sherritt’s share and GNC’s redirected share), which was
based on the midpoint of the Moa JV’s 2024 guidance ranges for production volumes, unit operating costs(1) and spending on
capital(1) as disclosed in the Outlook section of the MD&A, and the first half 2024 nickel and cobalt average reference prices of
US$8.00/lb and US$13.50/lb, respectively.
With third quarter average reference prices of both nickel and cobalt being below the first half 2024 average reference prices,
management is focusing efforts to maximize cash flows from sales of available inventories and maximize the amount received
in the fourth quarter under the Cobalt Swap up to the $50.0 million (including both Sherritt’s share and GNC’s redirected share)
that was previously indicated. Refer to the risks related to Sherritt’s corporate structure in the Corporation’s 2023 Annual
Information Form for further information on risks related to distributions from the Moa JV.
Production
Mixed sulphides production at the Moa JV for Q3 2024 was 4,148 tonnes 3% higher, compared to Q3 2023. Lower maintenance
and improved feed to the processing plant following the completion of the new Slurry Preparation Plant (“SPP”) in the first quarter
of 2024 contributed to higher production.
Sherritt’s share of finished nickel and cobalt production for Q3 2024 was 4,333 tonnes and 454 tonnes, 13% and 11% higher,
respectively, compared to Q3 2023 primarily due to higher mixed sulphides feed availability.
Sherritt International Corporation 7
Sherritt maintains its 2024 production guidance ranges for finished nickel and cobalt.
Fertilizer production for Q3 2024 was 65,205 tonnes, 35% higher compared to Q3 2023 in line with higher metals production,
implementation of operational improvements during the year, and due to the unplanned ammonia plant maintenance that limited
production in 2023.
NDCC(1)
NDCC(1) per pound of nickel sold for Q3 2024 was US$5.16/lb, compared to US$7.24/lb in Q3 2023. NDCC(1) significantly
improved primarily as a result of lower MPR/lb partly offset by lower cobalt by-product credits(2) as a result of lower average-
realized prices(1) for cobalt. MPR/lb was 19% lower for Q3 2024, compared to Q3 2023 primarily due to lower sulphur, natural
gas and diesel prices, lower maintenance costs and lower sulphuric acid purchases, operational improvements, and the impact
of higher nickel sales volumes. Prices for sulphur, natural gas and diesel were 13%, 64% and 10% lower in Q3 2024 compared
to Q3 2023.
Fertilizer net by-product credits were significantly higher in Q3 2024 compared to Q3 2023 as a result of higher sales volumes
and average-realized prices(1) and lower maintenance costs.
NDCC(1) for the nine months ended September 30, 2024 was US$6.10/lb and Sherritt maintains its 2024 guidance range for
NDCC(1) at US$5.50 to US$6.00/lb.
Spending on capital(1)
Sustaining spending on capital for Q3 2024 was $7.5 million compared to $12.8 million in Q3 2023. Sustaining spending on
capital of $22.3 million for the nine months ended September 30, 2024 is in line with 2024 guidance.
Growth spending on capital for Q3 2024 was $3.7 million compared to $2.9 million in Q3 2023. Spending in 2024 was primarily
related to the second phase of the Moa JV expansion program and is in line with 2024 guidance.
(1) Non-GAAP financial measures. For additional information see the Non-GAAP and other financial measures section of this press release.
(2) Cobalt by-product credits include Sherritt’s share of cobalt revenue per pound of nickel sold only.
Expansion program and strategic developments
Moa JV expansion program update
Phase two of the Moa JV’s expansion program, the Processing Plant, is continuing to advance. During the third quarter of 2024
piping installation continued and brick lining of vessels started.
During the quarter, the Moa JV finalized and began utilizing its US$12 million of foreign currency financing from a Cuban bank
to support international payments related to construction of the Sixth Leach Train, the primary component of phase two of the
expansion project.
Phase two commissioning and ramp up remains scheduled for 2025 with Sherritt expecting to commence the ramp up during
the first half of the year. With completion of phase two, annual mixed sulphide precipitate production is expected to further
increase toward the combined expansion target, including the new SPP, of approximately 20% of contained nickel and cobalt
and is expected to fill the refinery to nameplate capacity to maximize profitability from the joint venture’s own mine feed,
displacing lower margin third-party feeds and increasing overall finished nickel and cobalt production.
Strategic developments
Sherritt, through its MHP Project, is advancing a flowsheet to convert nickel intermediates via midstream processing to produce
high-purity nickel and cobalt sulphates, two fundamental feedstock materials for the electric vehicle supply chain.
During the quarter, Sherritt continued to advance engineering and process flowsheet development, to enhance and derisk the
flowsheet which already yielded very positive results for metal recoveries and impurity removals. Sherritt also continued its external
engagement with governments, potential customers and funding partners and advancing alignment on key commercial and project
parameters including identifying optimal site locations by the year end.
A continuous solvent extraction (“SX”) pilot commenced in October and this phase of engineering and process development work
is expected to be completed by year end.
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8 Sherritt International Corporation
Power
For the three months ended For the nine months ended
2024 2023 2024 2023
$ millions (33 ⅓% basis), except as otherwise noted September 30 September 30 Change September 30 September 30 Change
FINANCIAL HIGHLIGHTS
Revenue $ 12.9 $ 11.9 8% $ 36.7 $ 33.1 11%
Cost of sales 10.9 5.7 91% 24.2 15.6 55%
Earnings from operations 0.4 5.6 (93%) 8.7 14.8 (41%)
Adjusted EBITDA(1) 1.1 6.2 (82%) 10.5 16.6 (37%)
CASH FLOW
Cash (used) provided by continuing operations for operating
activities(1) $ (8.6) $ 2.8 (407%) $ (6.7) $ 9.5 (171%)
Free cash flow(1) (8.9) 2.2 (505%) (11.1) 7.6 (246%)
PRODUCTION AND SALES
Electricity (GWh(2)) 230 190 21% 645 520 24%
AVERAGE-REALIZED PRICE(1)
Electricity ($/MWh(2)) $ 51.85 $ 56.30 (8%) $ 51.70 $ 57.23 (10%)
UNIT OPERATING COSTS(1)
Electricity ($/MWh) 44.95 27.06 66% 35.26 27.07 30%
SPENDING ON CAPITAL(1)
Sustaining $ (1.5) $ 0.6 (350%) $ 2.6 $ 1.9 37%
(1) Non-GAAP financial measures. For additional information see the Non-GAAP and other financial measures section of this press release.
(2) Gigawatt hours (“GWh”), Megawatt hours (“MWh”).
Revenue for Q3 2024 was $12.9 million which is up 8% compared to Q3 2023 primarily due to higher production on better
equipment availability.
Unit operating costs(1) for Q3 2024 were $44.95/MWh compared to $27.06/MWh in Q3 2023 reflecting the higher planned
maintenance work on three gas turbines that began in the second quarter of 2024 and which has now been completed. In part,
the maintenance was required to also bring online another gas turbine to process additional gas being received as a result of
the new wells that Power brought into production. The maintenance work and related spend was successfully funded by Energas
through the Moa Swap and was incorporated into Sherritt’s 2024 Power division guidance which remains unchanged. With the
maintenance work now complete, Sherritt expects higher equipment availability to translate into higher production and dividends
to Sherritt.
As a key partner in supporting the Cuban government's plans to increase power production, Sherritt continues to work with its
Cuban partners to increase gas supply for additional electricity production. During the third quarter, a new well was drilled and
was put into production in early October. This key development marks the third new well going into production since the second
quarter of 2023, contributing to the improved utilization rates in the Corporation’s Power division, the significantly higher levels
of electricity production and the increased levels of dividends in Canada expected going forward.
Power recognized a recovery in spending on capital(1) of $1.5 million in Q3 2024 on previously capitalized inventory amounts
that were expensed in the period. For the nine months ended September 30, 2024 spending on capital was $2.6 million, primarily
driven by planned maintenance activities completed in the year. Sustaining spending on capital(1) to September 30, 2024 is in
line with annual guidance.