Regulated Information
First Quarter 2019 Interim Management Statement
26 May 2019 at 23:45 CEST
HIGHLIGHTS:
-- Group underlying EBITDA1 of EUR 15 million for Q1 2019, EUR 49 million
lower than Q1 2018, primarily due to lower commodity prices (zinc, lead,
silver and gold prices down 21%, 19%, 6% and 2% respectively), higher
energy prices and reduced production volumes across all commodities
-- Metals Processing underlying EBITDA of EUR 12 million, down EUR 47
million year-on-year, primarily due to reduced availability of raw
materials and consequently metal and by-product production caused
by liquidity constraints, lower realised zinc treatment charges
with a carryover of volumes priced on 2018 terms, lower commodity
prices and higher energy prices, partially offset by a stronger US
dollar against the Euro; and
-- Mining underlying EBITDA of EUR 19 million, up EUR 2 million
year-on-year, driven by continued operating performance
improvements at the East Tennessee mines, partially offset by the
negative EBITDA contribution of Myra Falls which had its
operations on temporary suspension in Q1 2019 and reduction in ore
milled and head grade at the Middle Tennessee mines
-- Net debt excluding zinc metal prepay2 of EUR 1.698 billion at the end of
Q1 2019, an increase of EUR 55 million on 31 December 2018 driven
predominantly by working capital outflow since the Q3 2018 results
announcement and reduced earnings in Q1 2019. Net debt inclusive of zinc
metal prepay and perpetual securities of EUR 1.829 billion at the end of
Q1 2019, an increase of EUR 58 million on 31 December 2018
-- Port Pirie Redevelopment ramp-up progressing well with the proportion of
residue in feed for the new TSL furnace, averaging 61% during Q1 2019 and
68% in April 2019, ahead of the fully ramped-up target of 40%
-- Myra Falls mine re-commenced operations in April 2019 and is now expected
to have first shipments of zinc in concentrate in Q3 2019
-- Implementation of the Group recapitalisation progressing in-line with
management's expectations with the lock-up of creditors having become
effective on 7 May 2019
KEY FIGURES
EUR million
(unless otherwise indicated) Q1 Q1 %
2018 2019 Change
Revenue
Metals Processing 957 816 (15%)
Mining 77 78 -
Other (77) (77) -
Group Revenue 957 817 (15%)
Underlying EBITDA
Metals Processing Underlying EBITDA 59 12 (79%)
Mining Underlying EBITDA 17 19 10%
Other and Eliminations Underlying EBITDA (12) (16) -
Group Underlying EBITDA 64 15 (76%)
Underlying EBITDA margin 7% 2% (74%)
Capex
Metals Processing 22 21 (5%)
Mining 28 11 (61%)
Other - - -
Group Capex 50 32 (37%)
-------------------------------------------------------- ----- ----- ------
Loans and borrowings, end of the period 1,550 1,844 19%
Less cash and cash equivalents, end of period 199 147 (26%)
Net Debt Exclusive of Zinc Prepay(3) 1,351 1,698 26%
Zinc Prepay 55 131 139%
Perpetual Securities 186 183 -
Net Debt Inclusive of Zinc Prepay and Perpetual
Securities 1,592 1,829 15%
Metals Processing Production
Zinc metal ('000 tonnes) 252 240 (5%)
Lead metal ('000 tonnes) 39 37 (6%)
Mining Production
Zinc in concentrate ('000 tonnes) 33 30 (8%)
Copper in concentrate ('000 tonnes) 0.5 0.4 (16%)
Silver ('000 troy ounces) 108 97 (10%)
Gold ('000 troy ounces) 0.4 0.4 -
Market(4)
Zinc price (USD/t) 3,421 2,702 (21%)
Lead price (USD/t) 2,523 2,036 (19%)
Silver price (USD/t.oz) 16.77 15.57 (6%)
Gold price (USD/t.oz) 1,331 1,304 (2%)
EUR/USD average exchange rate 1.23 1.14 (7%)
EUR/AUD average exchange rate 1.56 1.59 2%
GROUP FINANCIAL OVERVIEW
Revenue for Q1 2019 of EUR 816 million was down 15% on Q1 2018,
primarily driven by lower commodity prices, production volumes and
treatment charge terms, partially offset by a stronger US dollar against
the Euro.
Group underlying EBITDA of EUR 15 million in Q1 2019, a decrease of 76%
on Q1 2018, due to lower treatment charges, commodity prices and
production which was impacted by raw material availability in Metals
Processing due to liquidity constraints, partially offset by a stronger
US dollar against the Euro.
Capital expenditure was EUR 32 million in Q1 2019, representing a
decrease of 37% year-on-year driven by a substantial EUR 17 million
capex reduction in Mining with an active deferral of planned capital
expenditure to support short-term liquidity management whilst the
capital restructuring was progressing.
Net debt at the end of Q1 2019, excluding the zinc metal prepay, was EUR
55 million higher compared to the end of 2018 at EUR 1,698 million (EUR
1,643 million at the end of 2018). Net debt increased during the quarter
due to substantial working capital outflow due to higher commodity
prices, no new silver prepays, reduction in non-committed letter of
credit lines from banking counterparties, tightened credit terms with a
number of suppliers, weak earnings and the reclassification of EUR 19
million of prepayments for deliveries of zinc metal from deferred income
to loans and borrowing at 31 March 2019 as the Group had no ability to
settle by physical delivery of zinc metal from its own production. The
net debt inclusive of the zinc metal prepay and perpetual securities at
the end of Q1 2019 was EUR 1,829 million, up EUR 58 million compared to
the end of 2018. Cash balance at the end of Q1 2019 was EUR 147 million
compared to EUR 239 million at the end of 2018 with liquidity at the end
of Q1 2019 of EUR 151 million.
ZINC CONCENTRATES
The zinc concentrate 2019 benchmark treatment charges have been settled
at the end of Q1 2019 on the following terms:
--
-- Base TC of USD 245 per dmt (dry metric tonne) of concentrate at a
basis price of USD 2,700 per tonne;
-- Escalators of 5% from a zinc price of USD 3,000 per tonne; and
-- De-escalator of 2% below a zinc price of USD 2,700 per tonne.
SAFETY, HEALTH AND ENVIRONMENT
"Prevent Harm" is a core priority of Nyrstar. The Company is committed
to maintaining safe operations and to proactively managing risks
including with respect to people and the environment. At Nyrstar, we
work together to create a workplace where all risks are effectively
identified and controlled and everyone goes home safe and healthy each
day of their working life.
Continuing the positive trend seen in 2018, during Q1 2019, the
frequency rate of cases with time lost or under restricted duties (DART)
remained at 4.3, similar to 4.2 in the same period of 2018. However, the
frequency rate of cases requiring at least a medical treatment (RIR)
decreased by 8% compared to the same period of 2018. Three of our sites
continue to operate DART free in 2019.
No environmental events with material business consequences or long-term
environmental impacts occurred during the period.
OPERATIONS REVIEW: METALS PROCESSING
EUR million Q1 Q1 %
(unless otherwise indicated) 2018 2019 Change
Revenue 957 816 (15%)
Underlying EBITDA 59 12 (79%)
----------------------------- ---- ---- ------
Metal Processing Capex 22 21 (5%)
----------------------------- ---- ---- ------
Metals Processing delivered an underlying EBITDA result of EUR 12
million in Q1 2019, a decrease of 78% over Q1 2018 due to lower metal
and by-product production due to reduced availability of raw materials
caused by liquidity constraints, lower realised treatment charges with a
carryover of volumes priced on 2018 terms and higher energy prices,
partially offset by a stronger USD.
Capital spend in Q1 2019 decreased by 5% on Q1 2018 with active deferral
of planned capital expenditure to support short-term liquidity
management.
Q1 Q1 %
2018 2019 Change
Zinc metal ('000 tonnes)
Auby 39 39 1%
Balen/Pelt 69 62 (10%)
Budel 66 56 (15%)
Clarksville 24 22 (7%)
Hobart 54 60 10%
Total 252 240 (5%)
Lead metal ('000 tonnes)
Port Pirie 39 37 (6%)
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May 26, 2019 17:45 ET (21:45 GMT)
