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UPDATE 1-Nyrstar H1 beats expecations, gloomy on H2

Published 08/26/2009, 01:54 AM
Updated 08/26/2009, 01:57 AM
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* Nyrstar sees H2 2009 "negatively impacted" vs H1

* Ups cost-cut goal; sees 75 mln euros in cuts by end-2010

* H1 underlying EBITDA 30 mln euros vs forecast 17 million

* H1 net pft 1 million euros vs expected 20 million loss

* 158 million euros in cash at end-June; sees more buys

BRUSSELS, Aug 26 (Reuters) - Cost cuts and a recent rally in zinc prices helped Belgium's Nyrstar, the world's biggest zinc producer, to report better-than-expected first-half earnings on Wednesday, though it predicted a tough second half.

Nyrstar raised its previously-announced cost-cutting target, saying it was on track to deliver annual cost savings of 75 million euros ($107.2 million) by the end of 2010 compared with 2008, having previously set a target of 50 million euros.

It added it was on track to reduce headcount by 500 by the end of 2010, in line with a previous announcement, but warned that delayed effects of the economic slump would dent its second half compared with the first half.

"Whilst the company expects to benefit from improved metal prices and the restructuring initiatives across the group's global operations, financial performance in H2 2009 is expected to be negatively impacted by a number of lagging consequences of the global economic crisis compared to H1 2009," it said in its Wednesday statement.

It cited reduced acid prices and premiums, lower treatment charge terms and adverse movements in both the Australian dollar and U.S. dollar relative to the euro.

Nyrstar said it had 158 million euros in net cash at the end of June, against 176 million at the end of March, and repeated it could use the cash on select acquisition opportunities.

"The acquisition of the Gordonsville mine complex in Tennessee, U.S. is an example of this new strategic direction. The company will continue to actively explore other opportunities," Nyrstar said. (Reporting by Anne Jolis; Editing by David Holmes) ($1=.6997 Euro)

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