Nyrstar Back in Profit in 2009 after Cost Cutting

BRUSSELS, Feb. 25 -- Belgium's Nyrstar (NYR.BR: Quote), the world's biggest producer of zinc returned to profit in 2009 with a sharp reduction of costs and said it would once again pay out a dividend.

Underlying operating costs per tonne were down 14 percent from 2008, and the group said it was on track to achieve annual savings of 75 million euros ($101.6 million) by the end of this year.

Nyrstar achieved a 2009 net profit of 10 million euros, compared with a 595 million euro net loss in 2008, when the company took a 575 million impairment charge and scrapped its dividend. It plans to pay 0.10 euros per share for 2009.

A severe downturn in the construction and automotive industries led to lower demand for zinc, which is mainly used to galvanise steel to protect against corrosion, forcing Nyrstar to cut production significantly.

Underlying earnings before interest, tax, depreciation and amortisation (EBITDA), dropped 39 percent to 93 million euros, just above the average forecast of 92 million euros from five banks and brokerages polled by Reuters.

The group said it had had to operate in a very challenging market environment with an average zinc price of $1,659 per tonne in 2009, down 11 percent on 2008.

Zinc futures MZN3 ended 2009 at around $2,580 per tonne, against about $1,200 per tonne at the end of 2008. They are currently trading at around $2,200 per tonne.