Balen, Belgium (26 August 2009)
HIGHLIGHTS
Solid financial performance in very challenging market conditions
* Underlying EBITDA of ¤30 million (¤47 million in H2 2008)
* Working capital management resulted in strong operating cash flow
of ¤47 million despite rising metal prices
* Strong financial position with net cash of ¤158 million at 30
June 2009 (excluding the convertible bond issue in July 2009)
On track to deliver transformational changes
* On track to deliver sustainable annual costs savings of ¤75
million by end 2010 (compared to 2008), increased from previously
announced target of ¤50 million
* On track to reduce headcount by 500 by end 2010 in line with
previous announcement (300 reductions completed in H1 2009)
* Underlying operating costs per tonne of primary metal reduced by
9% to ¤527/tonne[1] in H1 2009 from ¤576/tonne in 2008, and
expected to reduce further (targeting ¤500/tonne in 2009)
Production responses to market conditions
* Zinc market metal production curtailed by 26% in line with
previous announcements - full production resumed at Clarksville
(US) and Budel (The Netherlands) in July, Balen (Belgium)
remains on care and maintenance
Clear strategic direction
* Announcement of new strategy at Strategy Update held during June
providing the Company with a clear direction to pursue its vision
of becoming the partner of choice in essential resources for the
development of a changing world
* Acquisition of Gordonsville mine complex in May in line with new
strategy
COMMENT
Despite challenging market conditions, the Company achieved a solid
financial result in H1 2009, with an underlying EBITDA of ¤30
million. The Company generated a positive operational cash flow of
¤47 million through strong working capital management, further
increasing the net cash position to ¤158 million at 30 June 2009,
despite zinc prices rising sharply from an unsustainable low level of
US$1,121/tonne at 31 December 2008 to US$1,555 at 30 June 2009.
The Company continues to make significant progress in pursuing
transformational changes. The restructuring programs across the
Group's global operations are on track to deliver aggressively
increased targeted annual cost savings of ¤75 million and reduce
headcount by 500 by the end of 2010, improving returns from the
Group's leading global multi-metals' smelting business.
The Company announced its new strategy at a Strategy Update held
during June. In pursuing this new strategy, the Company intends to
continue to improve and expand its leading global multi-metals'
smelting business, whilst selectively pursuing opportunities in
mining, favouring mines that support its existing business, and
markets where the Company has expertise (Zinc, Lead, Silver, Gold,
Copper) and proven capability. The acquisition of the Gordonsville
mine complex in Tennessee, US is an example of this new strategic
direction. The Company will continue to actively explore other
opportunities.
The Company successfully raised ¤120 million through a convertible
bond issue in July, enabling the Company to diversify its funding
sources and strengthen its balance sheet liquidity as well as to fund
growth opportunities, consistent with the announced strategy.
Roland Junck, chief executive officer of Nyrstar, said,
"We have continued the transformation of Nyrstar into a lean,
efficient, dynamic and flexible business focused on creating value
for all stakeholders. Whilst market conditions have remained very
challenging, we have delivered a solid financial performance and we
are confident that the initiatives we are implementing will enable
the business to rapidly benefit from improvements in market
conditions.
In June we announced a new strategy that provides Nyrstar with a
clear direction to pursue its vision of becoming the partner of
choice in essential resources for the development of a changing
world. Our strong financial position reinforced by our recent fund
raising puts Nyrstar in an excellent position to pursue this
strategy, through internal growth initiatives and through the
selective pursuit of opportunities in mining.
Despite the difficult credit environment the world is currently faced
with, we continue to believe that the fundamental outlook for
resources is positive. Notably, the US Purchasing Managers Index
(PMI), a well recognised lead indicator for economic growth, has
increased beyond the 41% threshold for the last 3 months. This,
coupled with ongoing significant growth in Asia, led by China,
suggests that the global economy has reached a turning point.
Accordingly, whilst in the short term we believe that markets are
likely to remain volatile, we maintain our belief that the underlying
fundamentals for medium to long term improvements in resources and
related asset prices remain intact."
OUTLOOK
Whilst the company expects to benefit from improved metal prices and
the restructuring initiatives across the Group's global operations,
financial performance in H2 2009 is expected to be negatively
impacted by a number of lagging consequences of the global economic
crisis compared to H1 2009; notably reduced acid prices and premiums,
in addition to lower treatment charge terms (H1 2009 benefited from
treatment charges carried over on 2008 terms) and adverse movements
in both the Australian dollar and US dollar relative to the Euro.
Note: All comparisons are made with H2 2008, unless otherwise stated.
[1] Total Group underlying operating cost per tonne of primary market
metal (zinc and lead, excluding ARA).
About Nyrstar
The partner of choice in essential resources for the development of a
changing world. Nyrstar is a leading global multi-metals' business,
producing significant quantities of zinc and lead as well as other
products (including silver, gold and copper). Nyrstar is listed on
NYSE Euronext Brussels under the symbol NYR. For further information
visit the Nyrstar website, www.nyrstar.com.
Contacts
Michael Morley
Director Legal and
External Affairs
T: +44 20 7408 8120
[email protected]
Investors
Chris James
Group Manager,
Investor Relations
T: +44 20 7408 8161
M: +44 7912 269 497
[email protected]
Media
Geert Lambrechts
Communications Advisor
T: +32 14 449 646
M: +32 473 637 892
[email protected]
The full press release can be downloaded from the following link:
This announcement was originally distributed by Hugin. The issuer is
solely responsible for the content of this announcement.