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Nyrstar recorded a €92 million ($121 million) loss in the first half of the year, as weaker base and precious metal prices, operational outages and restructuring charges weighed on earnings.
The result compares with a loss of €63 million in the second half of last year and a €32 million loss in the same period in 2012, the company announced on Thursday July 25.
Weaker base metal prices were partially offset by a strategic options hedge it opened during the period, while it has also hedged a portion of its gold and silver production to offset potentially lower prices in the second half, the Zurich-based company said.
The group’s metal processing unit achieved earnings before interest, tax, depreciation and amortisation (Ebitda) of €74 million, up 32% from a year ago as the one-off termination fee for its offtake agreement with Glencore offset a loss of revenues during planned maintenance undertaken in the period.
Group smelting operations produced 519,000 tonnes of zinc in the first half, down 5% from the previous six months, while lead production rose 18% to 86,000 tonnes.
Mined production of zinc concentrate, copper concentrate, gold and silver were down 9%, 3%, 52% and 17% respectively.
The mining unit’s Ebitda was €33 million, down 55% as weaker metal prices and operational issues at the Campo Morado mine weighed on profitability and output.
The group’s net result was also negatively affected by charges related to a cost-cutting programme and the restructuring of the business into three new business segments: mining, metals processing and marketing, sourcing and sales.
Former commercial smelting gm Mike Giunti left the company earlier this month as part of the restructuring, while chief operating officer Greg McMillan stepped down last month.
The company is confident that the restructuring and cost-cutting drive will enable it to improve its operational performance and increase margins through the marketing, sourcing and sales unit, ceo Roland Junck said on Thursday.
“We have previously spoken of the likelihood of continued short-term volatility in commodity markets, with conditions in [the first half] evidence of this, and if this continues into [the second half] our earnings will continue to be adversely affected,” Junck said.
“Having said that, we remain confident in the medium and long-term fundamentals of zinc and other related commodity markets,” he added.
The group’s Brussels-listed shares were trading at €3.26 at 0942 CET on Thursday, down 4.68% from the previous close.
Mark Burton mburton@metalbulletin.com Twitter: @mburtonmb