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Nyrstar (0JNH)

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Wednesday 26 August, 2009

Nyrstar

Nyrstar announces 2009 Half Year Results





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.




                     

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