Nyrstar NV

Published : February 23rd, 2012

announces 2011 Full Year Results

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Published: 07:00 CET 23-02-2012 /Thomson Reuters /Source: Nyrstar /XBRU: NYR /ISIN: BE0003876936

Nyrstar announces 2011 Full Year Results


Regulated Information

23 February 2012

HIGHLIGHTS

Considerable growth in underlying EBITDA despite a volatile market environment

  • Underlying EBITDA of EUR 265 million, up 26% in 2011 compared to 2010.
  • Solid financial position with gearing[1] of 35% as at 31 December 2011.
  • Proposed distribution of EUR 0.16 per share via a share capital reduction.

Substantial year on year increase in underlying EBITDA contribution from mining segment

  • Mining segment underlying EBITDA of EUR 72 million up 200% on 2010 (EUR 24 million) and smelting segment underlying EBITDA of EUR 235 million up 19% on 2010 (EUR 198 million).
  • Mining segment underlying EBITDA represents 27% of group underlying EBITDA, up 136% from 11% in 2010 and in line with production guidance is expected to continue to grow in 2012.

Achieved revised mine production target and continued improvements in costs

  • Zinc in concentrate production of 207kt (compared to revised guidance of 205kt to 215kt), up 146% from 2010 (84kt).
  • On track to realise the average zinc mining C1 cash cost[2] target of  USD 1,000 per tonne of payable zinc in 2012 having demonstrated substantial improvements in  2011 (USD 1,257 compared to USD 1,739 in 2010).
  • Moderate increase to smelting operating cost per tonne to EUR 532 despite energy price and exchange rate pressures (EUR 501 in 2010).

Expanding multi-metals footprint

  • Significant rise in mining segment production of copper, gold, silver and lead up 39 fold, 11 fold, 14 fold and 11 fold respectively.

Year on year increase in underlying group EBITDA per tonne driven by growth in mining segment

  • Group underlying EBITDA/t increased 10% to EUR 199/t (EUR 181/t in 2010) with mining underlying EBITDA per tonne having increased 22% to EUR 348 (EUR 286 in 2010)[3] and smelting underlying EBITDA per tonne improving to EUR 209 (EUR 184 in 2010)[4].

Creating a globally significant zinc mining business

  • Successfully completed the acquisition of Farallon Mining, the owner of the Campo Morado mine (Mexico) in January 2011 and the acquisition of Breakwater Resources (operations in Canada, Honduras and Chile) in August 2011.
  • Created dedicated post-acquisition integration function that achieved all major integration milestones.
  • Appointment of an experienced mining management team based in new Vancouver corporate office reporting to the Chief Operating Officer; comprising Group General Manager Mining North America, Group General Manager Mining Latin America, Group General Manager Exploration and Mining Development.

Volatile trading environment

  • Zinc price, as well as prices for the other metals in Nyrstar's multi-metals footprint, remained volatile throughout the year.
  • Sharp decline in metal prices in Q4 2011 occurred in conjunction with a large increase in mine production and adversely impacted earnings, as foreshadowed in the Second 2011 Interim Management Statement. Earnings were also adversely impacted by normal provisional pricing adjustments at the end of the reporting period and a purchase price allocation adjustment on inventories acquired as part of the Breakwater acquisition.
  • Eurodollar exchange rate averaged 1.39 in 2011 (up 5% compared to 2010) and was also very volatile, trading within a wide range of 1.29 to 1.49.

Another year of record production in the smelting segment

  • Second consecutive year of record smelter production, with 1.125 million tonnes of refined zinc metal production.
  • Despite treatment charge pressure, large improvement in underlying EBITDA driven by significant improvement in premiums and by-product gross profit (namely acid and silver at Port Pirie).
  • Contribution of EUR 78 million from "unlocking untapped value" initiatives through the identification, recovery and sale of silver bearing material at Port Pirie.

Strong financial position with a high quality portfolio of long-term debt

  • Demonstrated continued ability to raise high quality finance to fund growth with successful completion of rights offering for EUR 490 million in March 2011 and public offering of bonds for EUR 525 million in May 2011.
  • Financially well positioned to manage any continuing market volatility and macroeconomic uncertainty, and to fund further value accretive growth.

Putting our Strategy into Action

  • Launched "Strategy into Action", a disciplined approach to taking Nyrstar's strategy, Nyrstar2020, into every part of the business and engaging the entire workforce to achieve Nyrstar's vision of being the leading integrated mining and metals business.

Commenting on the 2011 full year results, Roland Junck, Chief Executive Officer of Nyrstar, said,

"In 2011 we achieved considerable growth in terms of our EBITDA, our scale of operations and our level of ambition. 

An underlying EBITDA of EUR 265 million, up 26% compared to 2010, is a pleasing result in a volatile market environment, particularly towards the end of the year when metal prices had fallen sharply. Group underlying EBITDA/t improved 10% to EUR 199/t, driven by a significant increase in our mining segment underlying EBITDA per tonne, up 22% from 2010 to EUR 348/t.. The scale of our mining segment continued to grow with zinc in concentrate production more than doubling to 207,000 tonnes, in-line with our revised guidance of 205,000 to 215,000 tonnes. Production of other metals, namely, copper, gold, silver and lead, increased significantly and have become important contributors to our financial results. Overall, the underlying EBITDA contribution from our mining segment has continued to grow, representing 27% of group underlying EBITDA in 2011 up from 11% in 2010. This demonstrates the importance of our mining segment which, in line with our 2012 production guidance, is expected to continue to grow.

Our smelting segment produced another year of record production and achieved an increased underlying EBITDA result despite treatment charge, energy price and exchange rate pressures and is expected to provide a solid contribution to our EBITDA in 2012. 

Towards the end of the year we launched Strategy into Action, a disciplined approach to taking our strategy, Nyrstar2020, into every part of our business, embedding annual plans and giving ownership of the group strategy to each operation and their management teams. Our five year ambition is to generate EBITDA of at least EUR 1.5 billion in 2016. Achieving this ambition will require us to maintain a sharp focus on the key strategic priorities that we believe will deliver success; namely through organic growth and acquisitions whilst also continually improving our operations by driving excellence in everything we do and seeking to unlock untapped value. 

Looking forward, we enter 2012 in a strong position, with several key milestones having been achieved and valuable lessons learnt during our journey in 2011. We have a clear ambition and strategy on which to continue our journey and, with Strategy into Action, the processes in place to support success. Our portfolio of assets is continuing to improve in both scale and quality, providing options for further growth and the flexibility to focus on maximizing shareholder value by enhancing margins, even at constant metal prices. We have a strong balance sheet, with a high quality and diverse portfolio of long term debt. We will continue to actively explore value accretive acquisitions based on our disciplined approach and strict investment criteria, whilst also building a comprehensive pipeline of organic growth opportunities reflecting our increased scale. By leveraging the passion and dedication of our people I am absolutely confident in our ability to continue to deliver on our promises."


CONFERENCE CALL
Management will discuss this statement in a conference call with the investment community on 23 February 2012 at 09:00am Central European Time. The presentation will be webcast live on the Nyrstar website, www.nyrstar.com, and will also be available in archive.

 

Nyrstar has today published the Nyrstar 2011 Mineral Resource and Mineral Reserve Statement
on www.nyrstar.com

 

[1] Gearing: net debt to net debt plus equity at end of period
[2] C1 cash costs are defined by Brook Hunt as: the costs of mining, milling and concentrating, on-site administration and general expenses, property and production royalties not related to revenues or profits, metal concentrate treatment charges, and freight and marketing costs less the net value of by-product credits.
[3] Mining segment underlying EBITDA per tonne of zinc in concentrate produced
[4] Smelting segment underlying EBITDA per tonne of zinc metal produced


About Nyrstar
Nyrstar is an integrated mining and metals business, with market leading positions in zinc and lead, and growing positions in other base and precious metals; essential resources that are fuelling the rapid urbanisation and industrialisation of our changing world.  Nyrstar has mining, smelting, and other operations located in Europe, the Americas, China and Australia and employs over 7,000 people. Nyrstar is incorporated in Belgium and has its corporate office in Switzerland. Nyrstar is listed on NYSE Euronext Brussels under the symbol NYR. For further information please visit the Nyrstar website, www.nyrstar.com

 

For further information contact:

Anthony Simms

Group Manager
Investor
Relations

T: +41 44 745 8157

M: +41 79 722 2152

anthony.simms@nyrstar.com

Kate Dinon

Group Manager
Corporate
Communications

T: +41 44 745 8154

M: +41 79 722 84 66

kate.dinon@nyrstar.com

Geert Lambrechts

Manager
Corporate
Communications

T: +32 14 449 646

M: +32 473 637 892

geert.lambrechts@nyrstar.com

 

The full press release can be downloaded from the following link:



Press Release (English)
Press Release (French)
Press Release (Dutch)



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Nyrstar NV

PRODUCER
CODE : NYR.BE
ISIN : BE0003876936
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Nyrstar is a zinc and silver producing company based in Belgium.

Nyrstar produces zinc, silver, copper, gold and lead in Mexico and in Peru, and holds various exploration projects in Mexico.

Its main assets in production are CORICANCHA in Peru and G-9 CAMPO MORADO in Mexico and its main exploration properties are CAMPO MORADO, EAST TENNESSEE and MIDDLE TENNESSEE in Mexico.

Nyrstar is listed in Germany. Its market capitalisation is €UR 459.4 millions as of today (US$ 588.4 millions, € 400.0 millions).

Its stock quote reached its highest recent level on June 24, 2005 at €UR 2.70, and its lowest recent point on November 28, 2008 at €UR 0.38.

Nyrstar has 935 640 000 shares outstanding.

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BERLIN (NYR.BE)
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