(MENAFN- ProactiveInvestors - N.America) Canadian mining and energy company Sherritt International (TSE:S) rose on Wednesday after saying it has inititated a restructuring plan that will cut about 10 percent of its salaried workforce as it works to slash costs.
The staff cuts were in the company's Toronto head office, where its employees have been reduced by roughly 25 percent, as well as in Sherritt's other divisions, apart from its key nickel operation in Madagascar.
The nickel and cobalt miner also said it has begun the sale process for some non-operating assets, including the sale of its Toronto office building.
The restructuring will result in a one-time charge of approximately $9 million to Sherritt in the fourth quarter, but is estimated to generate annual savings of about $10 million.
"We have well-defined 2014 priorities and are making clear advancements towards achieving them," said president and chief executive officer, David Pathe, in a release announcing the company's third quarter results.
"Strengthening our balance sheet and enhancing our liquidity have been key priorities for Sherritt."
The company has resource operations in several countries, including the Ambatovy nickel and cobalt mine in Madagascar, and the Moa nickel and cobalt mining and refining operation in Cuba. It also has extensive oil and power operations in Cuba.
In the third quarter, both the Moa and the Ambatovy joint ventures had record production, producing 18,584 tonnes of finished nickel, a 27 percent year-over-year increase.
Despite the strong production, nickel markets saw a pullback in pricing in September, largely due to stronger-than-anticipated nickel pig iron production data from China and continued gains in LME inventories.
For the three months to September 30, the company posted a net loss of $51.3 million, or 17 cents per share, down from a small profit of $1.1 million, or flat per share, in the same quarter of 2013. The company said the decline was mainly due to depreciation at its Ambatovy joint venture, and higher income taxes.
The Ambatovy Madagascar mining operation continues to be the company's top priority, Sherritt said, and was excluded from its restructuring plan given that the property has been ramping up production.
Revenues in the third quarter rose 55 percent to $302.7 million from $195.3 million a year earlier, on an adjusted basis.
Shares added 3.7 percent to C$2.79 in Toronto as of 10:55am ET on Wednesday, paring year-to-date losses to under 25 percent.
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