Nyrstar: First Half 2019 Results
Regulated Information
First Half 2019 Results
29 November 2019 at 07:00 CET
Nyrstar NV (“Nyrstar” or the “Company”) advises
that due to recent technical issues, the publication of its
consolidated accounts for H1 2019 are not available for publication
today. The Company is working to complete the consolidated accounts
as soon as possible and expects to have them published on the
website of Nyrstar (www.nyrstar.be) by no later than Friday 13
December 2019. It is important to note that at 30 June 2019, the
assets and liabilities of the Company will be primarily classified
as assets and liabilities held for sale and, in accordance with
IFRS 5 (“non-current assets held for sale and discontinued
operations”), the income statement will provide a detailed
presentation of the results from the continued operations and
separately the results from the discontinued operations. The
information presented on page 2 of this press release provides the
aggregated result for the Company (i.e. both continued and
discontinued operations).
SUMMARY:
- Group underlying EBITDA1 of EUR 3 million for H1 2019, a
decrease of EUR 117 million on H1 2018, primarily due to reduced
availability of raw materials caused by liquidity constraints as
the Company completed its balance sheet restructuring and
consequently reduced metal and by-product production, lower
commodity prices, a sustained unplanned stoppage of the blast
furnace and TSL furnace at Port Pirie in Q2 2019 and the negative
impact of metal at risk which was not hedged between March 2019 and
June 2019.
- Metals Processing underlying EBITDA of EUR 10 million, down EUR
108 million year-on-year
- Mining underlying EBITDA of EUR 17 million, down EUR 11 million
year-on-year
- Loss for H1 2019 was EUR 207 million, comprising of EUR 38
million from continuing operations and EUR 169 million from
discontinued operations
- Net debt inclusive of zinc metal prepay and perpetual
securities of EUR 1,936 million at the end of June 2019, an
increase of EUR 449 million on 30 June 2018, driven predominantly
by working capital outflow since the Q3 2018 results announcement
and reduced earnings in H1 2019. All of this debt has been assumed
by the restructured operating group of Nyrstar and will be part of
the liabilities classified as held for sale at 30 June 2019
- Port Pirie Redevelopment ramp-up impacted by a sustained
production outage between May and July 2019 due to unplanned
maintenance outages at the TSL furnace, blast furnace and
continuous drossing furnace
- Myra Falls mine re-commenced operations in April 2019
KEY FIGURES2
EUR
million (unless otherwise
indicated) |
H1 |
H1 |
% |
|
2018 |
2019 |
Change |
Income
Statement Summary |
|
|
|
Revenue |
1,930 |
1,587 |
(18%) |
Gross Profit |
600 |
511 |
(15%) |
Direct operating costs |
(485) |
(504) |
4% |
Non-operating and other |
6 |
(4) |
(176%) |
|
|
|
|
Underlying EBITDA |
|
|
|
Metals Processing Underlying EBITDA |
118 |
10 |
(91%) |
Mining Underlying EBITDA |
28 |
17 |
(41%) |
Other
and Eliminations Underlying EBITDA |
(26) |
(24) |
(8%) |
Group Underlying EBITDA |
120 |
3 |
(98%) |
Underlying EBITDA margin |
6% |
0% |
(97%) |
|
|
|
|
Embedded derivatives |
(3) |
(1) |
(71%) |
Restructuring expense |
(13) |
(37) |
188% |
M&A related transaction expense |
(2) |
- |
- |
Other income |
2 |
- |
- |
Profit /
(Loss) on disposal of investments |
- |
- |
- |
Underlying adjustments |
(16) |
(38) |
140% |
|
|
|
|
Depreciation, depletion,
amortisation |
(75) |
(66) |
(12%) |
Impairment gain / (loss) |
- |
- |
- |
Result from operating activities |
30 |
(101) |
(437%) |
|
|
|
|
Net finance expense (excluding fx) |
(71) |
(106) |
49% |
Net foreign exchange (loss)/gain |
(5) |
6 |
(227%) |
Income tax (expense) / benefit |
1 |
(7) |
(717%) |
|
|
|
|
Profit / (Loss) from continuing
operations |
(2) |
(38) |
- |
Profit / (Loss) from discontinued
operations |
(48) |
(169) |
252% |
Profit / (Loss)
for the period |
(49) |
(207) |
322% |
Basic Loss per share (EUR) |
(0.45) |
(1.89) |
320% |
|
|
|
|
Capex |
|
|
|
Metals Processing |
70 |
43 |
(39%) |
Mining |
63 |
28 |
(56%) |
Other |
1 |
1 |
(15%) |
Group Capex |
134 |
71 |
(47%) |
|
|
|
|
|
30 Jun 2018 |
30 Jun 2019 |
|
Loans and borrowings, end of the
period |
1,276 |
1,954 |
53% |
Less cash and cash equivalents, end of
period |
(78) |
(148) |
89% |
Net Debt3 |
1,198 |
1,806 |
51% |
|
|
|
|
Zinc Prepay |
104 |
130 |
25% |
Perpetual
Securities3 |
186 |
0 |
- |
Net Debt Inclusive of Zinc Prepay and Perpetual
Securities |
1,487 |
1,936 |
30% |
|
|
|
|
EUR
million (unless otherwise
indicated) |
H1 |
H1 |
% |
|
2018 |
2019 |
Change |
|
|
|
|
Metals Processing
Production |
|
|
|
Zinc metal (‘000 tonnes) |
528 |
480 |
(9%) |
Lead metal (‘000 tonnes) |
69 |
51 |
(51%) |
|
|
|
|
Mining Production |
|
|
|
Zinc in concentrate (‘000 tonnes) |
70 |
61 |
(13%) |
|
|
|
|
Market4 |
|
|
|
Zinc price (USD/t) |
3,268 |
2,732 |
(16%) |
Lead price (USD/t) |
2,456 |
1,962 |
(20%) |
Silver price (USD/t.oz) |
16.65 |
15.23 |
(12%) |
Gold price (USD/t.oz) |
1,319 |
1,307 |
(1%) |
EUR/USD average exchange rate |
1.21 |
1.13 |
(7%) |
EUR/AUD
average exchange rate |
1.57 |
1.60 |
2% |
GROUP FINANCIAL OVERVIEW
Revenue for H1 2019 of EUR 1,587 million was
down 18% on H1 2018, driven by lower zinc, lead, silver and gold
prices which were down 16%, 20%, 12% and 1% respectively and
decreased production volumes in zinc and lead smelting and zinc
mining.
Group gross profit for H1 2019 of EUR 511
million was down 15% on H1 2018, driven by lower production volumes
in both Metals Processing and Mining and lower zinc, lead, silver
and gold prices, partially offset by improving zinc treatment
charge terms.
Direct operating costs for H1 2019 of EUR 504
million increased 4% on H1 2018, due to a number of unplanned
maintenance outages at the smelters and higher mining costs as a
result of the continued ramp-up of operations at Myra Falls.
Group underlying EBITDA of EUR 3 million in H1
2019, a decrease of EUR 117 million on H1 2018, due to reduced
availability of raw materials caused by liquidity constraints as
the Company completed its balance sheet restructuring and
consequently reduced metal and by-product production, lower
commodity prices, a sustained unplanned stoppage of the blast
furnace and TSL furnace at Port Pirie in Q2 2019 and the negative
impact of metal at risk which was not hedged between March 2019 and
June 2019.
Depreciation, depletion and amortisation expense
for H1 2019 of EUR 66 million was down 12% year-on year.
Net finance expense excluding foreign exchange
for H1 2019 of EUR 105 million was up EUR 34 million on H1 2018
primarily due to net debt inclusive of zinc prepay and perpetual
securities increasing by 30% compared to end June 2018.
Income tax expense for H1 2019 of EUR 7
million (H1 2018: income tax benefit of EUR 1 million).
Loss in H1 2019 of EUR 207 million, compared to
a net loss of EUR 49 million in H1 2018, mainly as a result of
higher operating losses, restructuring expenses and consulting
expenses compared to the prior period.
Capital expenditure was EUR 71 million in H1
2019, representing a decrease of 47% year-on-year driven by a
substantial reduction in capital expenditure across the group as
the Company tightly managed its liquidity during the restructuring
process that was completed at the end of July 2019.
Net debt of EUR 1,936 million at the end of
H1 2019, inclusive of the zinc metal prepay and perpetual
securities, was 30% higher year-on-year (EUR 1,487 million at the
end of June 2018). Cash balance at the end of H1 2019 was EUR 148
million compared to EUR 78 million at the end of June 2018 with
immediately available liquidity at the end of H1 2019 of EUR 210
million. All of this debt has been assumed by the restructured
operating group of Nyrstar and will be part of the liabilities
classified as held for sale at 30 June 2019.
SAFETY, HEALTH AND
ENVIRONMENT
The frequency rate of cases with time lost or
under restricted duties (DART) was 6.0, this is 45% higher than in
the same period of last year. The frequency rate of cases requiring
at least a medical treatment (RIR) increased by 33% compared to H1
2018. The severity of the injuries in H1 2019, measured as the
number of days lost or under restrictions due to Lost Time or
Restricted Work Injuries was reduced by 105% compared to the same
period of last year.
At the end of H1 2019, the Auby smelter in
France and the Myra Falls Mine in Canada had achieved more than
500,000 and 800,000 working hours without restricted work or lost
time injuries, respectively.
No environmental events with material business
consequences or long-term environmental impacts occurred during H1
2019.
OPERATIONS REVIEW: METALS PROCESSING
EUR million |
H1 |
H1 |
% |
(unless otherwise indicated) |
2018 |
2019 |
Change |
|
|
|
|
Treatment charges |
123 |
146 |
19% |
Free metal contribution |
193 |
151 |
(22%) |
Premiums |
76 |
68 |
(11%) |
By-Products |
106 |
78 |
(27%) |
Other |
(47) |
(80) |
70% |
Gross Profit |
451 |
362 |
(20%) |
|
|
|
|
Employee expenses |
(109) |
(107) |
(3%) |
Energy expenses |
(117) |
(114) |
(3%) |
Other expenses /income |
(120) |
(135) |
(13%) |
Direct Operating
Costs |
(346) |
(356) |
3% |
Non-operating and other |
14 |
4 |
(71%) |
Underlying EBITDA |
118 |
10 |
(91%) |
|
|
|
|
Metal Processing Capex |
70 |
43 |
(39%) |
Metals Processing delivered an underlying EBITDA
result of EUR 10 million in H1 2019, a decrease of EUR 108 million
over H1 2018 due to reduced zinc, lead and by-product production
caused by reduced availability of raw materials with the liquidity
constraints imposed as the Company completed its balance sheet
restructuring.
Gross profit at EUR 362 million in H1 2019 was
down 20% compared to H1 2018 with lower zinc, lead, silver and gold
commodity prices and lower production partially offset by an
increase in the annual zinc benchmark treatment charges (base TC of
USD 147 per dmt of concentrate in 2018 versus USD 245 in 2019).
Direct operating costs year-over-year at EUR 356
million increased marginally, predominantly due to increased
contractor maintenance spend with various unplanned outages
experienced at the smelting sites.
Sustaining and growth capital spend in H1 2019
decreased substantially by 39% on H1 2018 due to the liquidity
constraints imposed on the Company during the completion of the
capital structure review process and balance sheet restructuring
which was completed at the end of July 2019.
EUR |
H1 |
H1 |
% |
DOC/tonne |
2018 |
2019 |
Change |
|
|
|
|
Auby |
477 |
548 |
15% |
Balen/Overpelt |
483 |
475 |
(2%) |
Budel |
411 |
443 |
8% |
Clarksville |
536 |
647 |
21% |
Hobart |
453 |
450 |
(1%) |
Port
Pirie5 |
1,117 |
1,488 |
33% |
DOC/tonne6 |
580 |
671 |
16% |
Direct operating costs per tonne increased by
16% in H1 2019 compared to H1 2018 due to lower production volumes
and a number of unplanned production outages across the smelting
sites.
|
H1 |
H1 |
% |
|
2018 |
2019 |
Change |
|
|
|
|
Zinc metal ('000
tonnes) |
|
|
|
Auby |
78 |
67 |
(14%) |
Balen/Overpelt |
137 |
132 |
(4%) |
Budel |
133 |
113 |
(15%) |
Clarksville |
52 |
48 |
(8%) |
Hobart |
129 |
121 |
(6%) |
Total |
528 |
480 |
(9%) |
|
|
|
|
Lead metal ('000
tonnes) |
|
|
|
Port Pirie |
69 |
51 |
(27%) |
|
|
|
|
Other products |
|
|
|
Copper cathode ('000 tonnes) |
1.6 |
2.0 |
23% |
Silver (million troy ounces) |
4.9 |
4.5 |
(8%) |
Gold (‘000 troy ounces) |
25.7 |
16.4 |
(36%) |
Indium metal (tonnes) |
21.4 |
19.3 |
(9%) |
Sulphuric acid ('000 tonnes) |
653 |
680 |
4% |
Metals Processing produced approximately 480,000
tonnes of zinc metal in H1 2019, representing a 9% decrease on H1
2018. The decrease in zinc metal production year-over-year was
caused by reduced availability of raw materials with the liquidity
constraints imposed as the Company completed its balance sheet
restructuring.
Lead market metal production at Port Pirie of
51kt was 27% lower compared to H1 2018 due to the failure of the
main gas duct on the TSL furnace. This failure of the TSL furnace
led to the subsequent shutdown of the blast furnace from 26 April
2019 until the end of July 2019 due to a lack of feed as a result
of the extended outage in the TSL furnace.
Sulphuric acid production of 680,000 tonnes in
H1 2019 was marginally higher compared to H1 2018.
OPERATIONS REVIEW: MINING
EUR million |
H1 |
H1 |
% |
(unless otherwise indicated) |
2018 |
2019 |
Change |
|
|
|
|
Treatment charges |
(14) |
(23) |
65% |
Payable metal contribution |
160 |
163 |
2% |
By-Products |
9 |
7 |
(18%) |
Other |
(7) |
(3) |
(53%) |
Gross Profit |
148 |
145 |
(2%) |
|
|
|
|
Employee expenses |
(42) |
(55) |
30% |
Energy expenses |
(11) |
(12) |
5% |
Other expenses |
(57) |
(54) |
(5%) |
Direct Operating
Costs |
(111) |
(121) |
31% |
|
|
|
|
Non-operating and other |
(9) |
(7) |
(22%) |
Underlying EBITDA |
28 |
17 |
(41%) |
|
|
|
|
Mining Capex |
63 |
28 |
(56%) |
Mining Underlying EBITDA of EUR 17 million in H1
2019 was EUR 11 million lower than in H1 2018 due to the lower zinc
price, continued ramp-up of the Myra Falls mine and a higher
benchmark zinc treatment charge set for 2019.
Mining capital expenditure in H1 2019 was EUR 28
million, down EUR 35 million year-on-year, due primarily to the
liquidity constraints imposed on the Company during the
restructuring process.
|
H1 |
H1 |
% |
DOC USD/tonne ore milled |
2018 |
2019 |
Change |
|
|
|
|
Langlois |
139 |
118 |
(15%) |
East Tennessee |
38 |
38 |
(2%) |
Middle Tennessee |
64 |
81 |
26% |
Myra
Falls |
- |
638 |
- |
Average DOC/tonne ore milled |
63 |
71 |
12% |
'000 tonnes |
H1 |
H1 |
% |
unless otherwise indicated |
2018 |
2019 |
Change |
|
|
|
|
Total ore milled |
2,075 |
1,886 |
(9%) |
|
|
|
|
Zinc in Concentrate |
|
|
|
Langlois |
12 |
13 |
9% |
East Tennessee |
36 |
32 |
(10%) |
Middle Tennessee |
22 |
15 |
(31%) |
Myra
Falls |
- |
1 |
|
Total |
70 |
61 |
(13%) |
|
|
|
|
Other metals |
|
|
|
Copper in concentrate |
0.8 |
0.8 |
(3%) |
Silver (‘000 troy oz) |
214 |
216 |
1% |
Gold (‘000 troy oz) |
0.7 |
1 |
40% |
Nyrstar’s Mining operations produced
approximately 61kt of zinc in concentrate in H1 2019, a decrease of
13% compared to H1 2018.
FORWARD-LOOKING STATEMENTS
This release includes forward-looking statements
that reflect Nyrstar's intentions, beliefs or current expectations
concerning, among other things: Nyrstar’s results of operations,
financial condition, liquidity, performance, prospects, growth,
strategies and the industry in which Nyrstar operates. These
forward-looking statements are subject to risks, uncertainties and
assumptions and other factors that could cause Nyrstar's actual
results of operations, financial condition, liquidity, performance,
prospects or opportunities, as well as those of the markets it
serves or intends to serve, to differ materially from those
expressed in, or suggested by, these forward-looking statements.
Nyrstar cautions you that forward-looking statements are not
guarantees of future performance and that its actual results of
operations, financial condition and liquidity and the development
of the industry in which Nyrstar operates may differ materially
from those made in or suggested by the forward-looking statements
contained in this news release. In addition, even if Nyrstar's
results of operations, financial condition, liquidity and growth
and the development of the industry in which Nyrstar operates are
consistent with the forward-looking statements contained in this
news release, those results or developments may not be indicative
of results or developments in future periods. Nyrstar and each of
its directors, officers and employees expressly disclaim any
obligation or undertaking to review, update or release any update
of or revisions to any forward-looking statements in this report or
any change in Nyrstar's expectations or any change in events,
conditions or circumstances on which these forward-looking
statements are based, except as required by applicable law or
regulation.
About NyrstarThe Company is
incorporated in Belgium and, following completion of the
recapitalisation/restructuring has a 2% shareholding in the Nyrstar
group. The Company is listed on Euronext Brussels under the symbol
NYR. For further information please visit the Nyrstar website:
www.nyrstar.be
For further information contact:
Anthony Simms - Head of External
Affairs T: +41 44 745 8157 M: +41 79
722 2152 anthony.simms@nyrstar.com
MINING PRODUCTION ANNEX
PERIOD |
Production KPI by Site |
Ore milled ('000 tonnes) |
Mill head grade |
Recovery |
Concentrate |
Metal in concentrate |
Zinc (%) |
Lead (%) |
Copper (%) |
Gold (g/t) |
Silver (g/t) |
Zinc (%) |
Lead (%) |
Copper (%) |
Gold (%) |
Silver (%) |
Zinc(kt) |
Lead(kt) |
Copper(kt) |
Zinc(kt) |
Lead(kt) |
Copper(kt) |
Gold(k’toz) |
Silver(m‘toz) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONTINUING
OPERATIONS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
H1 2018 |
Langlois |
209 |
5.86% |
- |
0.49% |
0.15 |
37.32 |
94.2% |
- |
77.8% |
75.0% |
85.1% |
23 |
- |
3.6 |
11.6 |
- |
0.8 |
0.7 |
214 |
East Tennessee |
1,132 |
3.38% |
- |
- |
- |
- |
93.9% |
- |
- |
- |
- |
58 |
- |
- |
35.9 |
- |
- |
- |
- |
Middle Tennessee |
734 |
3.19% |
- |
- |
- |
- |
95.1% |
- |
- |
- |
- |
34 |
- |
- |
22.3 |
- |
- |
- |
- |
Myra Falls |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
MiningTotal |
2,075 |
3.57% |
- |
0.49% |
0.15 |
37.32 |
94.4% |
- |
77.8% |
75.0% |
85.1% |
115 |
- |
3.6 |
69.8 |
- |
0.8 |
0.7 |
214 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
H1 2019 |
Langlois |
205 |
6.50% |
- |
0.48% |
0.14 |
37.24 |
94.7% |
- |
78.4% |
74.1% |
88.0% |
24 |
- |
3.2 |
12.6 |
- |
0.8 |
0.7 |
216 |
East Tennessee |
1,064 |
3.20% |
- |
- |
- |
- |
94.6% |
- |
- |
- |
- |
52 |
- |
- |
32.2 |
- |
- |
- |
- |
Middle Tennessee |
582 |
2.83% |
- |
- |
- |
- |
93.7% |
- |
- |
- |
- |
24 |
- |
- |
15.5 |
- |
- |
- |
- |
Myra Falls |
36 |
2.91% |
0.38% |
0.31% |
0.67 |
21.53 |
64.9% |
2.9% |
53.6% |
43.9% |
69.1% |
1.3 |
0.12 |
0.6 |
0.7 |
0.00 |
0.1 |
0.3 |
17 |
MiningTotal |
1,886 |
3.44% |
0.38% |
0.45% |
0.22 |
34.90 |
93.8% |
2.9% |
74.7% |
69.6% |
85.2% |
115 |
- |
3.7 |
61.0 |
- |
0.8 |
1.0 |
233 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Change |
Langlois |
(2%) |
11% |
- |
(2%) |
(2%) |
(0%) |
0% |
- |
1% |
(1%) |
3% |
6% |
- |
(11%) |
9% |
- |
(3%) |
(6%) |
1% |
East Tennessee |
(6%) |
(5%) |
- |
- |
- |
- |
1% |
- |
- |
- |
- |
(11%) |
- |
- |
(10%) |
- |
- |
- |
- |
Middle Tennessee |
(21%) |
(11%) |
- |
- |
- |
- |
(1%) |
- |
- |
- |
- |
(30%) |
- |
- |
(31%) |
- |
- |
- |
- |
Myra Falls |
- |
|
|
|
|
|
|
|
|
|
|
- |
- |
- |
- |
- |
- |
- |
- |
MiningTotal |
(9%) |
(3%) |
- |
(7%) |
51% |
(6%) |
(0.61%) |
- |
(4%) |
(7%) |
0% |
(12%) |
- |
5% |
(13%) |
- |
4% |
40% |
9% |
1 Underlying EBITDA is a non-IFRS measure of earnings, which is
used by management to assess the underlying performance of
Nyrstar’s operations and is reported by Nyrstar to provide
additional understanding of the underlying business performance of
its operations. Nyrstar defines “Underlying EBITDA” as profit or
loss for the period adjusted to exclude loss from discontinued
operations (net of income tax), income tax (expense)/benefit, share
of loss of equity-accounted investees, gain on the disposal of
equity-accounted investees, net finance expense, impairment losses
and reversals, restructuring expense, M&A related transaction
expenses, depreciation, depletion and amortization, income or
expenses arising from embedded derivatives recognised under IAS 39
“Financial Instruments: Recognition and Measurement” and other
items arising from events or transactions clearly distinct from the
ordinary activities of Nyrstar.
2 Small differences in tables are due to rounding to zero
decimal places
3 The zinc prepay (Politus) have been accounted for entirely as
financial liabilities at 30 June 2019 whilst at 30 June 2018 the
zinc prepay was accounted for as deferred income. The Perpetual
Securities have been accounted for entirely as loans and borrowings
at 30 June 2019 whilst at 30 June 2018 the Perpetual Securities
were accounted for as equity and not included in loans and
borrowings.
4 Zinc, lead and copper prices are averages of LME daily cash
settlement prices. Silver/Gold price is average of LBMA daily
fixing / daily PM fixing, respectively
5 Per tonne of lead metal and zinc contained in fume
6 DOC/tonne calculated based on segmental direct operating costs
and total production of Zinc and Lead Market Metal
- H1-2019 Results EN - FINAL
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