ASARCO reports fourth quarter and full year results.NEW YORK--(BUSINESS WIRE)-- Jan. 31, 1996 -- ASARCO ASARCO American Smelting and Refining Company Incorporated (NYSE NYSE See: New York Stock Exchange :AR) today reported net earnings of $68.2 million, or $1.60 per share, before the effect of a special after-tax charge of $79.5 million ($122.3 million on a pre-tax basis). The special charge which was announced earlier this month related to the termination of lead refining operations at the Company's Omaha, Nebraska “Omaha” redirects here. For other uses, see Omaha (disambiguation). Omaha is the largest city in the State of Nebraska, United States. It is the county seat of Douglas County.GR6 As of the 2000 census, the city had a population of 390,007. plant, the effects of adoption of a new accounting principle, and additions to the Company's reserve for costs associated with previously closed operations. After taking into account the special charge, the Company reported a net loss of $11.3 million, or 27 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , for the fourth quarter of 1995 compared to net earnings of $48.2 million, or $1.15 per share, for the fourth quarter of 1994. As a result of acquiring an additional interest in Southern Peru Copper Corporation (SPCC SPCC abbr. Society for the Prevention of Cruelty to Children SPCC (US) n abbr (= Society for the Prevention of Cruelty to Children) → Kinderschutzbund m ) in April 1995, Asarco is consolidating SPCC in its financial statements effective January 1, 1995. The Company had previously accounted for its interest in SPCC under the equity method of accounting. Sales of products and services were $799.6 million in the fourth quarter of 1995 compared to $588.1 million in the fourth quarter of 1994. Had SPCC been consolidated in Asarco's financial statements in the fourth quarter of 1994, sales of products and services would have been $796.6 million. For the full year 1995, Asarco reported net income of $248.6 million, or $5.87 per share, before the special charge. Including the special charge, net earnings for 1995 were $169.2 million, or $4.00 per share, compared to $64.0 million, or $1.53 per share, for 1994. Results for the full year 1994 included an after-tax gain of $31.9 million on the sale of the Company's interest in Asarco Australia Limited, a $30.7 million after-tax charge to increase the Company's environmental reserves, and a $2.6 million after- tax gain related to the recovery of a bad debt which had previously been written off. Sales of products and services for the full year 1995 were $3.2 billion compared to $2.0 billion in 1994. Had SPCC been consolidated in Asarco's financial statements in 1994, sales would have been $2.7 billion. Asarco's beneficial interest in fourth quarter consolidated copper production was 249.2 million pounds compared to 203.6 million pounds a year ago. This 22.4% increase is primarily attributable to increased production at the Company's Ray, Arizona Ray is a ghost town in Pinal County, Arizona, United States. There is a huge copper mine there. The town of Kearny, Arizona was founded by the Kennecott Mining Company in 1954 as a planned community to accommodate the populations of Ray, Barcelona and Sonora, which were about to be mine and to Asarco's increased ownership of SPCC. For the full year 1995, Asarco's beneficial copper production rose to 898.4 million pounds from 804.6 million pounds in 1994. Prices for the Company's metals in the fourth quarter of 1995 were mostly higher compared to the same period of 1994. The average price for copper on the New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Commodity Exchange (COMEX COMEX A division of the New York Mercantile Exchange (NYMEX). Formerly known as the Commodity Exchange, COMEX is the leading US market for metals futures and options trading. COMEX See New York Mercantile Exchange (NYM). ) and the London Metal Exchange London Metal Exchange (LME) A market for trading base metals, where traded options contracts are available against the underlying futures contract. (LME See London Metal Exchange. LME See London Metal Exchange (LME). ) was $1.32 per pound for the fourth quarter of 1995 compared to $1.29 on the COMEX and $1.26 on the LME in the fourth quarter of 1994. Approximately 50% of consolidated copper sales are based on the COMEX price with the balance based on LME quotations . The LME price for lead in the fourth quarter of 1995 was 32 cents per pound compared to 29 cents in the fourth quarter of 1994. Zinc averaged 46 cents per pound on the LME in the fourth quarter of 1995 compared to 50 cents in the prior year period. The molybdenum molybdenum (məlĭb`dənəm) [Gr.,=leadlike], metallic chemical element; symbol Mo; at. no. 42; at. wt. 95.94; m.p. about 2,617°C;; b.p. about 4,612°C;; sp. gr. 10.22 at 20°C;; valence +2, +3, +4, +5, or +6. price was lower in the fourth quarter of 1995 at $4.34 per pound compared to $8.57 per pound in the prior year. The price of silver was $5.26 per ounce in the fourth quarter of 1995 compared to $5.14 in the fourth quarter of 1994. For the full year 1995, copper averaged $1.35 on the COMEX and $1.33 on the LME compared to $1.07 on the COMEX and $1.05 on the LME in the prior year. The LME price for lead averaged 29 cents per pound in 1995 compared to 25 cents in 1994. Zinc averaged 47 cents per pound in 1995 compared to 45 cents in the prior year. The average price of molybdenum increased to $7.42 per pound in 1995 from $4.50 in the prior year. Silver averaged $5.19 per ounce in 1995 compared to $5.28 in 1994. Reporting the Company's results, Richard de J. Osborne, Chairman of the Board of Asarco, said, "Net earnings in the fourth quarter of 1995 before the special charge exceeded the earnings of any previous quarter in 1995 despite somewhat lower metal prices. Metal prices were strong in the fourth quarter, although the average price for copper was slightly below the average in the third quarter and the full year 1995. The net loss reported includes a $34.3 million after-tax provision for termination of lead refining operations at our Omaha plant, a $22.7 million after-tax charge for the effects of adopting a new accounting principle, and a $22.5 million after-tax charge for additions to the Company's reserve for costs associated with previously closed operations. "Copper production from the Company's mines increased substantially in the fourth quarter of 1995 over the prior year. This higher production was the result of the resumption RESUMPTION. To reassume; to promise again; as, the resumption of payment of specie by the banks is general. It also signifies to take things back; as the government has resumed the possession of all the lands which have not been paid for according to the requisitions of the law, and the of full operations in the second quarter of this year at the Company's Ray mine, and the start up of production at SPCC's new solvent extraction Solvent extraction A technique, also called liquid extraction, for separating the components of a liquid solution. This technique depends upon the selective dissolving of one or more constituents of the solution into a suitable immiscible liquid solvent. electrowinning (SX-EW) plant in November. This SX-EW plant at the Toquepala mine produced approximately 10.0 million pounds of refined copper in the fourth quarter of 1995 and will in the future produce approximately 80.0 million pounds of refined copper annually from leaching low-grade ore that could not otherwise be economically mined." In November 1995, SPCC offered to exchange new common shares for labor shares issued by its Peruvian Branch to workers under prior law in Peru. These labor shares which are traded on the Lima stock exchange Lima Stock Exchange Peru's major securities market. represented a 17.3% interest in the Peruvian Branch which comprises substantially all of the operations of SPCC in Peru. The offer ended on December 29, 1995 with 80.5% of the labor shares tendered. SPCC now owns 96.6% of the Branch. Asarco's equity interest in SPCC is 54.1% and its voting interest Voting interest in business and accounting is a percentage of voting stock owned. This notion is different from economic interest that refers to a percentage of all the equity issued, including preferred stock, warrants, and so on. is 61%. The Company's economic interest in the assets of SPCC, net of the remaining labor share interest, is 52.3%. The common shares issued in exchange for the labor shares are listed on both the New York and Lima, Peru stock exchanges. The Company's balance sheet at December 31, 1995 reflects the effect of this transaction. "Asarco's non-metal businesses both earned record profits in 1995. The Company's specialty chemicals A Specialty chemical is a chemical produced for a specialized use. They are produced in lower volume than bulk chemicals, of which petrochemicals, made from oil feedstocks, are the most common. However, both are produced in a chemical plant. business had profits of $5.1 million in the fourth quarter and $23.0 million for the full year continuing the rapid growth in earnings since 1993. Earnings from the aggregates business increased in 1995 to $8.6 million. We expect both businesses to continue their solid performance. "Asarco had a very good year in 1995. Operations in each of the Company's core businesses demonstrated marked improvement from the prior year. At the same time, the Company substantially completed its program of selling its non-core businesses. We increased our ownership of SPCC, and successfully completed an exchange offer increasing the transparency of the value of SPCC and giving SPCC improved access to worldwide capital markets. "At December 31, 1995, the Company has a beneficial interest in proven and probable copper ore reserves with a contained copper content of approximately 35 billion pounds, which is more than 4.5 times its reserve position ten years ago. Ore reserves represent the future of a mining company and Asarco's ore reserve position is one of the largest among western world copper producers." Commenting on the Company's outlook for 1996, Osborne said, "We expect 1996 to be another good year for Asarco as demand for the Company's metals continues to be strong. Prices for copper have declined in recent weeks, but market fundamentals are still positive. Asarco's specialty chemicals and aggregates businesses are also expected to perform well in 1996." ASARCO Incorporated, headquartered in New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. , is one of the world's leading integrated producers of nonferrous non·fer·rous adj. 1. Not composed of or containing iron. 2. Of or relating to metals other than iron. nonferrous Adjective 1. metals, principally copper, lead, zinc, silver, and molybdenum. Asarco also produces specialty chemicals and aggregates. Asarco had 1995 sales of $3.2 billion. CONTACT: Jerry Cooper, Corporate Communications Corporate communications is the process of facilitating information and knowledge exchanges with internal and key external groups and individuals that have a direct relationship with an enterprise. ASARCO Incorporated, 212-510-1810 |
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