Sherritt to sell Toronto HQ in cost cutting effort
Sherritt didn't say how many employees would be affected by the downsizing but says it's aiming to reduce costs by about $10 million a year
TORONTO—Sherritt International Inc. says it’s cutting the size of its head office workforce by 25 per cent and preparing to sell the building as part of a previously announced cost-cutting plan.
The Toronto-based mining company also says that the restructuring will reduce its overall salaried workforce by about 10 per cent, without making cuts at a key nickel operation in Madagascar.
Sherritt wouldn’t confirm how many employees would be affected by the downsizing but says it’s aiming to reduce costs by about $10 million a year. It expects to recognize a one-time restructuring expense of $9 million in the fourth quarter.
Its shares were ahead 3.35 per cent or nine cents to $2.78 on the Toronto Stock Exchange mid-morning Wednesday.
As with many other resource-based companies, and equities generally, Sherritt’s stock price has dropped dramatically over the past three months amid concerns about a global economic slowdown that could reduce demand for commodities.
Three months ago, Sherritt stock was worth about $4.36 but hit its 52-week low of $2.58 on Wednesday.
The restructuring of Sherritt’s white-collar workforce was disclosed in the company’s third-quarter financial report. According to a regulatory filing in March, the company had about 8,000 employees at its various operations around the world. However, since then, it has completed the sale of its coal business in Western Canada to Westmoreland Coal.
Sherritt said on October 29 that its continuing operations had a net loss of $51.3 million or 17 cents per share, compared with a small profit a year earlier.
The company has a diverse 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.
“We have well-defined 2014 priorities and are making clear advancements towards achieving them,” said David Pathe, president and CEO.
Sherritt said its third quarter net loss, which compared with $1.1 million of net income a year earlier, was mainly due to $41 million of depreciation on the value of the Ambatovy joint venture, plus higher income tax expenses. It had a similar net loss of 16 cents per share from continuing operations in the second quarter of 2014.