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UPDATE 1-Sherritt posts bigger loss due to coal sale charge

Wednesday, 19 Feb 2014 | 8:46 AM ET

Feb 19 (Reuters) - Canadian miner Sherritt International Corp posted a bigger fourth-quarter loss due to an impairment charge of C$466.8 million ($426 million) related to the pending sale of its coal mines, and it slashed its quarterly dividend.

Sherritt is selling its coal business for C$946 million to focus on nickel and oil. The company said on Wednesday it expected to close the deal in the current quarter.

The coal business has been struggling as weak demand drags down thermal coal prices.

Sherritt's fourth-quarter loss widened to C$673.8 million, or C$2.27 per share, from C$16.9 million, or 6 Canadian cents, a year earlier. Excluding items, the company posted a loss of 13 Canadian cents per share.

The company's net loss from continuing operations, excluding coal, was 46 Canadian cents per share, compared with net earnings of 2 Canadian cents per share.

Revenue fell about 17 percent to C$108.6 million.

Sherritt cut its quarterly cash dividend to 1 Canadian cent per share from about 4 Canadian cents to allow the company to meet near-term funding requirements in the face of persistently low commodity prices.

The reduction in dividend will cut the annual cost by about C$39 million in 2014.

Toronto-based Sherritt has nickel mining and refining projects and operations in Canada, Cuba, Indonesia and Madagascar. It also has oil and power operations in Cuba.

Sherritt's shares, which have fallen about 12 percent since the company announced the sale of the coal business, closed at C$3.43 on Tuesday on the Toronto Stock Exchange.