BUSINESS

Sherritt drops to second-quarter loss as weak commodity prices impact revenue

07/31/2013 04:05 EDT | Updated 09/30/2013 05:12 EDT
TORONTO - Sherritt International (TSX:S) dropped to a second-quarter net loss of $10.7 million as lower commodity prices wore into its results, and the firm made plans to reduce its capital spending budget.

The mining and energy company said Wednesday the loss was worth four cents per share, falling from a profit of $40.8 million, or 14 cents per share, a year earlier.

Revenue dropped to $338.5 million from $377.1 million as it was pressured by the erosion of demand for nickel, cobalt, coal and oil, which has pulled down prices.

Sherritt's spending on capital and intangibles for the quarter was down to $53.5 million from $62.8 million a year ago.

"We continue to recognize a positive medium- and long-term outlook for all of our businesses, especially our base metals," said president and CEO David Pathe said in a release.

The company intends to cut its capital spending by 13 per cent, or $37 million, to help counter the declines.

"The spending reductions will be spread across the businesses and will not compromise the ability to operate safely and efficiently," Pathe added.

Sherritt produces nickel from operations in Canada, Cuba, Indonesia and Madagascar, an island off the east coast of Africa.

The company is also the largest producer of thermal coal in Canada and the largest independent energy producer in Cuba, with extensive oil and power operations across the island.