Timminco reports third-quarter loss of $34.2 million, sales nearly double

TORONTO - Timminco Ltd. （TSX:TIM） said Tuesday it lost $34.2 million in its latest quarter as its sales nearly doubled from a year ago.

The silicon producer said the loss amounted to 17 cents per share for the quarter ended Sept. 30 compared with a loss of $18.5 million or 15 cents per share a year ago when the company had fewer shares outstanding.

Sales totalled $36.9 million, up from $19.1 million.

"Our silicon metal operations ran at full capacity for the third straight quarter, the result of continued strong demand from our traditional chemicals and aluminum industry customers," chairman and chief executive Heinz Schimmelbusch said.

"We continue to work toward developing new customer markets for our solar grade silicon product line and, to that end, shipped several metric tonnes of trial chunks and bricks to potential customers."

In August, Timminco announced a joint venture with Michigan-based silicone producer Dow Corning Corp. at its plant in Becancour, Que.

Under the agreement, Dow Corning will acquire a 49 per cent interest in the joint venture for US$39.7 million in cash and up to $10.0 million more subject to certain performance criteria.

The company said Tuesday that proceeds from the partnership deal were used to fully repay its existing bank debt.

Over the last two years, Timminco was forced to cut production, sell assets, delay expansion and temporarily cut jobs due to difficult market conditions and reduced demand. The company also restructured its business, and booked a loss on the sale of its magnesium group.

Timminco shares have been extremely volatile in the past two years as debate raged about whether its proprietary process for producing high-purity silicon for solar cells is as good as the company claims.

The company, which was once a penny stock back when its main business was magnesium products, began a remarkable rise in early 2007. Its shares peaked at more than $30 in 2008 along with hopes for solar power, and then fell hard.

Shares in the company, which reported its results after the close of markets, were down 3.5 cents at 40.5 cents on the Toronto Stock Exchange.