6 November 2015

5N Plus' Q3 sales hit by falling metal prices

For third-quarter 2015, specialty metal and chemical products firm 5N Plus Inc of Montreal, Québec, Canada has reported revenue of $68.7m, down on $114.4m a year ago, negatively impacted by continuing erosion in relevant underlying commodity prices that have on average fallen by 55% since the beginning of the year.

Margins were negatively impacted by falling metal prices including bismuth, indium, selenium and tellurium, which fell by 20%, 33%, 29% and 56% respectively in Q3 alone.

Adjusted adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) was positive $1.1m, down on $8.1m a year ago. Net debt fell by $11.7m, positively impacted by working capital management. At the end of September, net debt was $46.7m, down from $84m at the end of 2014.

Backlog as at the end of September was 134 days of sales outstanding, up by 12 days from the end of 2014 and by 25 days from the end of September 2014. Backlog and bookings are also negatively impacted by the decreases in underlying commodity pricing.

"Demand for our products remained in line with expectations, with a slight decrease in shipments following the usual pattern of the European summer slowdown," says president & CEO Jacques L'Ecuyer. "Continuing and persistent erosion in prices of almost all of our key metals continues to significantly weigh on our financial performance," he adds. "Until this trend stops or its magnitude decreases, we expect our financial performance to remain disappointing other than from a cash flow standpoint, which should stay relatively strong as we reduce our working capital requirements in line with underlying commodity pricing trends." 

5N Plus also announced that L'Ecuyer is to step aside from his role. The board of directors has hence initiated a process to identify a new president & CEO. L'Ecuyer will remain in post until the new president & CEO has been appointed.

See related items:

5N Plus grows 10.7% in 2014, despite Q4 slump in commodity pricing

5N Plus receives approval for share repurchase plan

5N Plus reports Q3 revenue up 5% year-on-year

5N Plus announces new US$125m credit facility

Tags: 5N Plus

Visit: www.5nplus.com