3 Min Read
By Ashutosh Pandey
Feb 19 (Reuters) - Canadian miner Sherritt International Corp reported a bigger fourth-quarter loss as it took an impairment charge related to the pending sale of its coal operations, and the company slashed its quarterly dividend.
Sherritt's shares fell as much as 12 percent in morning trading on Wednesday, making them one of the top percentage losers on the Toronto Stock Exchange.
The company, once Canada's biggest thermal coal producer, said in December it would sell its coal business for C$946 million ($857 million) to focus on nickel and oil after years of weak demand and prices.
Sherritt, which expects to finalize the sale of the mines in the current quarter, recorded a related impairment charge of C$466.8 million for the fourth quarter.
The company said it cut its quarterly dividend to 1 Canadian cent per share from 4.3 Canadian cents to help it meet near-term funding requirements in the face of persistently low commodity prices.
The dividend cut will reduce the annual payout by about C$39 million in 2014, the company said. Sherritt said it also planned to another C$33 million in costs this year.
"We continue to look to cut spending across our businesses in both our corporate office and our business units ... We are also looking at the way we procure commodities to further reduce our costs," Chief Executive David Pathe told Reuters.
Sherritt, whose shares have lost almost 40 percent in the past year, is under pressure from George Armoyan-led activist investment firm Clarke Inc, which has put up a slate of board nominees that will go to a shareholder vote on May 6.
Armoyan and his affiliates control about 5 percent of Sherritt.
Takota Asset Management, another shareholder, has urged the company to buy back shares.
Toronto-based Sherritt's revenue fell about 17 percent in the quarter to C$108.6 million.
Excluding its coal operations, the company reported a net loss of 46 Canadian cents per share, compared with net earnings of 2 Canadian cents per share a year earlier.
Sherritt has agreed to sell its coal royalty portfolio and stake in coal development assets to a group led by Altius Minerals Corp for C$481 million.
Westmoreland Coal Co will buy its operating coal assets - Prairie Operations in Alberta and Saskatchewan, and Mountain Operations in Alberta - for C$465 million.
Sherritt has nickel mining and refining projects and operations in Canada, Cuba, Indonesia and Madagascar. It also has oil and power operations in Cuba.
The company's shares were down 8 percent at C$3.13 at midday.