London 04/05/2016 - Canada-listed specialty metals firm 5N Plus posted a net loss of $1.9 million in the quarter ending March 31, 2016, compared with a loss of $1.95 million in the comparative 2015 period.
Before taxes and financing costs, its operating earnings for the first three months of this year were $814,000 compared with a $2.5-million loss in the first three months of last year.
"Following a difficult year in 2015, we are reporting an improvement in profitability, which is fostered by relative stability in commodity prices, favourable sales mix supported in part by selective approach toward market opportunities and positive outcome from efforts and initiatives aimed at improving efficiency, reducing costs, and managing working capital," president and CEO Arjang Roshan said in a release.
The company said its first quarter revenues were $63.9 million against $95.7 million last time due to commodity price weakness over the 12-month period. Its net debt fell to $7.3 million to $27.5 million - down from $74.9 million in the year-ago quarter - due to a reduction in working capital requirements.
"The company continued to manage cash diligently, operating expenses judiciously and adapted a more selective approach toward market opportunities; all of which positively contributed to improvement in bottom‐line performance and further enabled the company to reduce its overall debt level," it said.
5N Plus, listed on the Toronto Stock Exchange, handles bismuth, gallium, germanium, indium, selenium and tellurium as well as inorganic chemicals based on metals and compound semiconductor wafers. Prices of many of these materials slumped to multi-year lows in 2015, which saw the company swing from profitability to the minus column, forcing it to restructure.
It recorded a net loss of $97.2 million for 2015, swinging from a $10.7-million profit in 2014. Despite some recent modest price rallies, many of the minor metals remain depressed and business conditions in the sector are subdued.
"We have begun to actively engage select suppliers and implement mutually acceptable agreements, which realign the nature of the relationship with the realities of the market," Roshan added.
As well, 5N Plus is looking to implement a new strategic plan by the latter part of the year.
"We continue to make progress toward this target and have begun a comprehensive process examining our core business. We are also closely evaluating growth opportunities in order to develop a range of options and compatibility with our future trajectory," Roshan said.
(Editing by Mark Shaw)