Shares in Talvivaara Mining were marginally marked down after the Finnish nickel and zinc producer confirmed that it was cutting full-year production guidance for nickel to 17,000 tonnes from the previous target of 25,000-30,000 tonnes. The market had already priced in the revision, but comparative revenues at the half-year stage also contracted due to a one-quarter fall in the price of the metal.
Talvivaara's full-year expectations were dampened by unseasonal heavy spring rainfall in the Kainuu region, which diluted leach solutions at the Sotkamo mine. Nickel and zinc production reached 3,194 and 6,686 tonnes, respectively, during the second quarter, taking the first-half total to 6,568 tonnes of nickel and 14,576 tonnes of zinc. The excess water meant that Talvivaara had to mine lower-grade ore further away from the primary crushing area than originally planned. The company intends to shift its focus from mining to primary heap reclamation over the remainder of the year.
During the six -month period, Talvivaara bolstered its balance sheet by raising €83m (£65m) via an equity placing and a further €110m from a bond issue.
JPMorgan Cazenove now expects a full-year loss per share of 19¢ (from 7¢) and has cut its 2013 EPS estimate from 28¢ to 11¢.
| TALVIVAARA MINING COMPANY (TALV) | ||||
|---|---|---|---|---|
| ORD PRICE: | 138p | MARKET VALUE: | £375m | |
| TOUCH: | 138-138p | 12-MONTH HIGH: | 379p | LOW: 119p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 135¢ | NET DEBT: | 126% | |
| Half-year to 30 Jun | Turnover (€m) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2011 | 104 | -6.5 | -3.0 | nil |
| 2012 | 72 | -42.5 | -12.0 | nil |
| % change | -30 | - | - | - |
£1=€1.275 | ||||
