PARIS Oct 21 Eramet on Monday said it
would step up cost saving measures to counter the effects of a
depressed nickel market, which contributed to a five percent
fall in the mining group's third quarter sales.
Benchmark prices of nickel, mainly used in stainless
steel, sank to a four-year low in July due to poor industrial
demand and rising stocks, leaving a swathe of global production
operating at a loss.
Eramet reported a 5 percent year-on-year fall in
third-quarter sales to 754 million euros ($1.03 billion), which
included a 23 percent decrease for its nickel division.
"The Group is stepping up its measures to decrease its costs
and capital expenditure, adjust its productions to its markets
and reduce its working capital requirements," Eramet said in a
statement, without giving details.
The company reiterated that current operating profit in the
second half would be "significantly lower" than in the first
half, when Eramet reported a 9 million euro loss.
When Eramet published first-half results at the end of July,
the group revised down investments planned for this year and
said it expected to scale these back further in 2014-2015.
In the third quarter, its metallurgical nickel production in
New Caledonia, where the group's nickel mines are based, fell 3
percent year-on-year, putting output down 6 percent over the
first nine months of 2013, Eramet said.
The decline in nickel activity in third quarter was partly
offset by a 6 percent rise in manganese sales, supported by
higher ore prices and record quarterly output for the company in
manganese ore and sinter, it said.
Eramet also said that its consolidated net cash was
"slightly negative" as of Sept. 30, compared to a positive 127
million euros at the end of June, citing dividend payments to
minority shareholders and previous investments.
($1 = 0.7302 euros)
(Reporting by Gus Trompiz. Editing by Jane Merriman)