Nyrstar Shares Hit All-Time Low After Weak H1 Result

Belgium's Nyrstar, the world's biggest zinc producer, reported a sharp fall in first-half profit due to lower zinc prices and unexpected costs, missing forecasts and sending its shares to an all-time low.

Nyrstar shares fell as much as 10.3% to €6.55 in early morning trade on Tuesday, about a third of what investors paid when the company listed on Euronext Brussels at the end of last October.

"Nyrstar came in with results below consensus estimates mainly driven by an unexplained cost of €46m at the gross margin level," Degroof analyst Bernard Hanssens said in a research note.

Earnings before interest, tax, depreciation, and amortisation (EBITDA) fell to €81m from 358 million euros a year earlier and below the €138.4m average forecast in a Reuters poll of analysts.

Nyrstar's management ruled out launching a share buyback scheme anytime soon to support its ailing share price, a move which it had previously considered.

"We decided it was not the appropriate time," chief executive Paul Fowler told a media conference call. Revenue declined 18% to €1.408bn.

"Despite a falling zinc price and weakening dollar exchange rate, we have continued to focus on managing factors that are within our control," Fowler said.

"Through a combination of prudent and disciplined management we have improved production of both zinc and lead metal and maintained largely flat costs in an inflationary environment," Fowler said.

The company did not provide a detailed forecast for the rest of the year but said it continued to target an increase in zinc market metal and cathode production of up to 3% in 2008 and that it would continue to seek to cut costs.

By Julien Ponthus, Reuters .