Grupo Mexico First Quarter 2002 CEO Report.Business Editors MEXICO Mexico, city, Mexico Mexico or Mexico City, Span. Ciudad de México (Méjico), city (1990 pop. 8,236,960; 1991 met. area est. 20,899,000), central Mexico, capital and largest city of Mexico. CITY--(BUSINESS WIRE)--April 26, 2002 Grupo Mexico US GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). Highlights (Expressed in thousands of US dollars unless noted - US GAAP)(1)
Financial Data
Three Months ended:
March 31 March 31 Var.
2002 2001 %
Net Sales 630,770 778,859 (19.0)
Cost of Sales 447,326 635,334 (29.6)
Administrative Expenses 33,951 34,640 (2.0)
Operating Income 80,421 36,582 119.8
EBITDA 149,493 108,885 37.3
Financing Costs (net) 48,358 61,788 (21.7)
Net Loss (Majority) (20,940) (48,805) (57.1)
Loss per Share (Majority) (0.03) (0.08) (57.1)
Market Metals Prices
Three Months ended:
March 31 March 31 Var.
2002 2001 %
Copper (US Cts/Lb) 72.2 81.9 (11.8)
Zinc (US Cts/Lb) 36.0 46.3 (22.2)
Silver (Dlls/Oz) 4.5 4.5 -
Gold (Dlls/Oz) 290.4 263.5 10.2
Molybdenum (US Dlls/Lb) 2.7 2.3 17.4
Lead (US Cts/Lb) 22.3 22.4 (0.4)
(1) Because of the nature of our mining business activities, whose
sales are 100% denominated in US dollars, we have presented
figures in accordance with Generally Accepted Accounting
Principles (GAAP) in the United States under the heading "Applies
to US GAAP" and subsequently in accordance with Mexican GAAP under
the heading " Applies to Mexican GAAP".
Grupo Mexico (G.Mexico) consolidated financial results for the first quarter ended on March 31, 2002, include the operations of Americas A·mer·i·cas , the See America. Mining Corporation (AMC (Advanced Mezzanine Card) See AdvancedTCA. ), Grupo Ferroviario Mexicano Noun 1. Mexicano - a Mexican (or person of Mexican descent) living in the United States Mexican-American Mexico, United Mexican States - a republic in southern North America; became independent from Spain in 1810 (GFM GFM Government-Furnished Material GfM Gesellschaft Für Musikforschung GFM Global Freight Management GFM Gruyere Fribourg Morat (Swiss / Fribourg Railways-Bus Organisation) GFM Global Force Management GFM Gram Formula Mass ) and Infraestructura y Transportes Mexico (ITM ITM See: In-the-money ), which consolidate Consolidate To combine the assets, liabilities, and other financial items of two or more entities into one. Notes: This term is generally used in the context of consolidated financial statements. the results of the operating companies operating company A business that engages in transactions with outsiders. : Minera Minera (Welsh: Mwynglawdd) is a small village in the county borough of Wrexham in north-east Wales. It borders Coedpoeth to the east and Bwlchgwyn to the west. Mexico (MM), ASARCO ASARCO American Smelting and Refining Company , 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 ) and Ferromex Ferromex, a contraction of Ferrocarril Mexicano or "Mexican Railroad", is a private rail consortium that operates the largest (by mileage) railroad in Mexico. . Applies to US GAAP: G.Mexico consolidated results for the first quarter ending on March 31, 2002 are highlighted by improved efficiencies that allowed us to obtain significant operating and administrative cost administrative cost Managed care A cost incurred by the 'business' end of a health care facility or university–eg, staffing and personnel costs, nursing home and hospital administration, insurance, and overhead expenses. Cf Indirect costs. savings at all of our subsidiaries. These savings were the result of various measures taken last year, including significant personnel reductions, the suspension of some of our mining operations, and adjustments to our smelting smelting, in metallurgy, any process of melting or fusion, especially to extract a metal from its ore. Smelting processes vary in detail depending on the nature of the ore and the metal involved, but they are typified in the use of the blast furnace. plants and refineries in response to the current conditions of the mining industry. In addition, the company reduced its purchases of ores from third parties, which did not reflect margins for G.Mexico mining companies, as a result of the poor market conditions. The combined effect of these actions reduced costs and expenses in the first quarter of 2002 by 28.2% when compared to the same period of the previous year, with total savings of $188.7 million. However, these savings were not enough to offset the negative effect of the drop in average copper prices (11.8%) and zinc zinc, metallic chemical element; symbol Zn; at. no. 30; at. wt. 65.38; m.p. 419.58°C;; b.p. 907°C;; sp. gr. 7.133 at 25°C;; valence +2. Zinc is a lustrous bluish-white metal. It is found in Group 12 of the periodic table. prices (22.2%) in first quarter of 2002 with an amount of $124.7 million, compared to prices during the first quarter of 2001. G.Mexico consolidated sales for the first quarter of 2002 amounted to $630.8 million, representing a 19.0% decrease compared to the previous year's first quarter. This decrease can be attributed primarily to the lower metal prices and to lower volumes sold. 77.5% of total revenues is denominated in dollars and corresponds to the mining division. The remaining 22.5% corresponds mainly to the railroad railroad or railway, form of transportation most commonly consisting of steel rails, called tracks, on which freight cars, passenger cars, and other rolling stock are drawn by one locomotive or more. division and is mostly denominated in pesos. G.Mexico's first quarter operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before of $80.4 million represent 12.7% of sales compared to 4.7% during the same period of the previous year. The operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. (EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become ) for the first quarter was $149.5 million, representing 23.7% of sales. Investments The investment program carried out during the first quarter includes $73.8 million that were expensed during 2002. Of this amount, $63.1 million correspond to the mining division with the completion and startup (STARTing UP) "At startup" means when the computer is first turned on or when a program is first loaded. See Startup folder. of the new electrolytic e·lec·tro·lyt·ic adj. 1. Of or relating to electrolysis. 2. Produced by electrolysis. 3. Of or relating to electrolytes. e·lec plant at the Cananea Cananea (from the Apache term for "horse meat") is a city in the northern Mexican state of Sonora. It is the seat of the municipality of the same name. The population of the town was 30,515 as recorded by the 2000 census. mine in Mexico, and continued work on the expansion of the Toquepala-Cuajone leaching leaching, method of extraction in which a solvent is passed through a mixture to remove some desired substance from it. A simple example is the passage of boiling water through ground coffee to dissolve and carry out the chemicals necessary for producing the beverage. system in Peru projected for completion at the end of August of 2002. The 30% expansion of the capacity of the concentrator in Toquepala reached 84% completion at the end of March 2002, with an investment of $43.3 million out of the $69.5 million budgeted. When this project reaches completion at the end of August 2002, the Toquepala concentrator milling capacity would increase from 45,000 metric tons (Transparent Optical Networking Services) A marketing term for providing dark fiber to a customer. The customer is responsible for generating the transmission signal and interpreting it at the other end. See dark fiber. to 60,000 metric tons per day. This increase in milling production will represent an annual increase of 122,815 metric tons of concentrates to be processed at the Ilo smelter. In respect to the expansion and modernization modernization Transformation of a society from a rural and agrarian condition to a secular, urban, and industrial one. It is closely linked with industrialization. As societies modernize, the individual becomes increasingly important, gradually replacing the family, of the smelter in Ilo, final evaluations of the technical-economical proposals received are under way and the project is expected to start construction during the second quarter of 2002, with an investment of more than $500 million and a construction period of almost 3 years. Upon completion, this smelter will be capable of smelting up to 1.83 million metric tons of copper concentrates per year and will accomplish the desired economical and environmental requirements. The Cuajone leaching facilities expansion project is being developed to expand the leaching pads and the grinding grinding, process by which surface material is removed from an object, usually metal, by the abrasive action of a rotating wheel or a moving belt that contains abrasive grains. plant. This will allow the plant to produce 18 tons per day of copper contained in solution for treatment at the 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. operation in Toquepala. The combined progress of engineering, procurement and construction  The introduction to this article is vague. To comply with Wikipedia's guidelines, it should be improved. for this project reached 97% completion as of March 31,
2002.The investment in the transport division during the first quarter of 2002 was $10.7 million dollars, which was invested in infrastructure and technological improvements for the railroad system. Financing In consideration of the circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or prevailing in the markets and with the purpose of adjusting to the current credit conditions and obligations, we are currently negotiating with our banks and investors in order to obtain conditions more in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with current needs. We hope to finalize fi·nal·ize tr.v. fi·nal·ized, fi·nal·iz·ing, fi·nal·iz·es To put into final form; complete or conclude: "They have jointly agreed ... this process with the lenders during the second quarter of 2002 in order to reestablish Re`es`tab´lish v. t. 1. To establish anew; to fix or confirm again; to restore; as, to reëstablish a covenant; to reëstablish health. s> Verb 1. the financial conditions necessary to improve the credit ratings of GMexico and its mining subsidiaries. The total debt as of March 31, 2002, is $2,766.5 million dollars, with cash on banks of $231.3 million dollars, which is equivalent to a net debt of $2,535.2 million dollars. The following chart summarizes G.Mexico net debt (expressed in thousands of dollars):
Company Balance as of Due in:
March 30, 2002 2002
Grupo Mexico 87,000 37,000 (1)
Grupo Minero Mexico 1,309,749 144,562 (1)
Asarco Inc. 991,163 450,000 (1)
Southern Peru Copper Corp. 299,043 NA
Grupo Ferroviario Mexicano 79,529 3,992
Total 2,766,484 650,554
(1) We are in the process of negotiating with the banks and investors
participating in these credits with the purpose of adjusting the
amortization of the debt to better align with the current
conditions.
Other Events: On January January: see month. 24, 2002, GMexico and its subsidiary, Infraestructura y Transportes Mexico, S.A. de C.V. (ITM), entered into a joint-venture agreement with Grupo Carso Grupo Carso is a conglomerate of companies owned by the Mexican tycoon Carlos Slim. It was formed in 1990 after the merge of Corporación Industrial Carso and Grupo Inbursa. The name Carso stands for Carlos Slim and Soumaya Domit de Slim †, wife of Slim. , S.A. de C.V. and its subsidiary, Empresas Frisco, S.A. de C.V. (Frisco), and Grupo Financiero Inbursa, S.A. de C.V. and its subsidiary, Sinca Inbursa, S.A. de C.V. Sociedad de Inversion inversion /in·ver·sion/ (in-ver´zhun) 1. a turning inward, inside out, or other reversal of the normal relation of a part. 2. a term used by Freud for homosexuality. 3. de Capitales (Sinca). Under the agreement, Frisco and Sinca will transfer their shares of Ferrosur, S.A. de C.V. (Ferrosur) to ITM and subscribe To sign up for a service. Contrast with unsubscribe. See opt-in and syndication format. (messaging) subscribe - To request to receive messages posted to a mailing list or newsgroup. In contrast to the mundane use of the word this is often free of charge. ITM shares representing 20% of the latter's capital stock. As a consequence of this agreement, ITM will own 100% of the shares of Ferrosur, who has the concession CONCESSION. A grant. This word is frequently used in this sense when applied to grants made by the French and Spanish governments in Louisiana. of the public transportation service of the southeastern railway routes, in addition to 74% of the shares of subsidiary GFM, who is the sole owner of Ferromex. With this agreement, we hope to improve the Pacific-South, Center-South and North-South routes of the Mexican Mexican named after or originating in Mexico. Mexican axolotl see ambystomamexicanum. Mexican beaded lizard (Heloderma horridum Republic in order to better compete with the other rail lines that have access to the South route. As a consequence, we expect to achieve better trip times, improve costs of service, and make more efficient use of the infrastructure, thus significantly increasing the volumes of cargo transported in such routes and resulting in other important benefits for the users of our railroad services. The execution of the final agreements and other documents necessary to establish the joint venture is subject to obtaining official authorization The right or permission to use a system resource; the process of granting access. See access control. of the Comision Federal de Competencia (Antitrust Antitrust The antitrust laws apply to virtually all industries and to every level of business, including manufacturing, transportation, distribution, and marketing. They prohibit a variety of practices that restrain trade. Office) in accordance with the guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. of the privatization privatization: see nationalization. privatization Transfer of government services or assets to the private sector. State-owned assets may be sold to private owners, or statutory restrictions on competition between privately and publicly owned of the railroad concessions, the laws in the antitrust issues and the Railroad Law. The company anticipates that a favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. resolution will be issued in the coming weeks.
GRUPO MEXICO FIRST QUARTER 2002 CEO REPORT
MEXICAN GAAP:
Highlights (Expressed in thousands of Mexican Pesos unless noted -
Mexican GAAP)(1)
Financial Data
Three Months ended:
March 31 March 31 Var.
2002 2001 %
Net Sales 5,817,478 7,897,564 (26.3)
Cost of Sales 4,090,034 6,269366 (34.8)
Administrative Expenses 285,918 335,230 (14.7)
Operating Income 538,207 309,116 74.1
EBITDA 1,441,526 1,292,968 11.5
Financing Costs (net) 446,374 624,605 (28.5)
Net Income ( Loss)
(Majority) 328,873 (230,693) (242.6)
Income (Loss) per Share
(Majority) 0.50 (0.35) (242.6)
Market Metals Prices
Three Months ended:
March 31 March 31 Var.
2002 2001 %
Copper (US Cts/Lb) 72.2 81.9 (11.8)
Zinc (US Cts/Lb) 36.0 46.3 (22.2)
Silver (Dlls/Oz) 4.5 4.5 -
Gold (Dlls/Oz) 290.4 263.5 10.2
Molybdenum (US Dlls/Lb) 2.7 2.3 17.4
Lead (US Cts/Lb) 22.3 22.4 (0.4)
(1) For purposes of comparison of these captions, amortization of the
excess carrying amount over the cost of shares generated by the
Asarco acquisition is not included.
Grupo Mexico (G.Mexico) consolidated financial results for the first quarter ended on March 31, 2002, include the operations of Americas Mining Corporation (AMC), Grupo Ferroviario Mexicano (GFM) and Infraestructura y Transportes Mexico (ITM) which consolidate the results of the operating companies: Minera Mexico (MM), ASARCO, Southern Peru Copper Corporation (SPCC) and Ferromex. Applies to Mexican GAAP: G.Mexico consolidated results for the first quarter ending on March 31, 2002 are highlighted by improved efficiencies that allowed us to obtain significant operating and administrative cost savings at all of our subsidiaries. These savings were the result of various measures taken last year, including significant personnel reductions, the suspension of some of our mining operations, and adjustments to our smelting plants and refineries in response to the current conditions of the mining industry. In addition, the company reduced its purchases of ores from third parties, which did not reflect margins for G.Mexico mining companies, as a result of the poor market conditions. The combined effect of these actions reduced costs and expenses in the first quarter of 2002 by 33.7% when compared to the same period of the previous year, with total savings of Ps 2,228.6 million pesos. However, these savings were not enough to offset the negative effect of the drop during the first quarter in average copper prices (11.8%) and zinc prices (22.2%), equivalent to approximately Ps 1,649.3 million pesos, in comparison to average prices during the same period of the previous year. G.Mexico consolidated sales for the first quarter of 2002 amounted to Ps 5,817.5 million pesos, representing a 26.3% decrease compared to the previous year's first quarter. This decrease can be attributed primarily to the lower metal prices and to lower volumes sold. Approximately 77.5% of total revenues is denominated in and corresponds to the mining division. The remaining 22.5% corresponds mainly to the railroad division and is mostly denominated in pesos. G.Mexico's first quarter operating earnings of Ps 538.2 million pesos represent 9.3% of sales compared to 3.9% during the same period of the previous year The operating cash flow (EBITDA) for the first quarter was Ps1,441.5 million pesos, representing 24.8% of sales. Consolidated Integral financing cost in accordance with Mexican GAAP for the first quarter of 2002 was a net income of Ps 260.6 million pesos. This was integrated by a financing cost of debt for Ps 446.4 million pesos, by an income in monetary position of Ps 437.8 million pesos, and by an income through exchange rate due to the appreciation of the mexican peso against the dollar of Ps 269.2 million pesos. MINING DIVISION Americas Mining Corporation (AMC) Americas Mining Corporation consolidated financial results for the first quarter ended on March 31, 2002, include the operations of the operating companies: Minera Mexico (MM), ASARCO, and Southern Peru Copper Corporation (SPCC), which represent our mining operations in Mexico, United States of America UNITED STATES OF AMERICA. The name of this country. The United States, now thirty-one in number, are Alabama, Arkansas, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, New Hampshire, and in Peru.
Highlights
(Expressed in thousands of US dollars unless noted - US GAAP)
Financial Data
Three Months ended:
March 31 March 31 Var.
2002 2001 %
Net Sales 488,575 663,482 (26.4)
Cost of Sales 363,786 558,315 (34.8)
Administrative Expenses 26,160 27,992 (6.5)
Operating Income 52,862 24,040 119.8
EBITDA 98,629 77,175 27.8
Financing Costs (net) 48,641 58,878 (17.4)
Net Loss (Majority) (36,528) (53,581) 31.8
Sales for the first quarter of 2002 amounted to $488.6 million dollars, representing a 26.3% decrease compared to sales of $663.5 million during the same quarter of the previous year. This decrease can be attributed primarily to the lower metals prices and due to a reduction in metals sold in accordance with the company's policy to reduce cost instead of increase volumes. Sales volumes for our main metal, copper, represent a reduction of 22,812 metric tons, or 8.6%, against the same period in the previous year. Zinc and silver has shown the same trend with a decrease of 21.6% and 49.4% respectively. Those reductions also were affected by the strike of the unionized workers in the mining units of La Caridad Caridad is a municipality in the Honduran department of Valle. , San Martin, Pasta While the only basic difference between these names is the shape of the pasta, each pasta is typically matched with a particular sauce based on cooking time, consistency, ability to hold sauce, ease of eating, etc. de Conchos Conchos (kōn`chōs), river, c.350 mi (560 km) long, rising in S Chihuahua state, N Mexico, and flowing N and NE to the Rio Grande. Dams along its middle course provide water for extensive cotton oases just south of the city of Chihuahua. and in the Electrolitic Zinc Plant in San Luis Potosi San Lu·is Po·to·sí A city of central Mexico northeast of León. It was founded in the late 1500s and is a mining, transportation, and industrial center. Population: 659,000. Noun 1. .
AMC-Sales
Production Sold
3 Months 3 Months
ended ended Var
Mar 31, Mar 31, %
2002 2001
Copper (TM) 241,451 264,263 (8.6)
Zinc (TM) 37,849 48,276 (21.6)
Silver (Kg) 168,824 333,476 (49.4)
Gold (Kg) 471 2,552 (81.5)
Molybdenum (TM) 3,274 3,839 (14.7)
Lead (TM) 7,242 16,012 (54.8)
Metals Prices Market
3 Months 3 Months Var
ended ended %
Mar 31, Mar 31,
2002 2001
Cobre (US Cts/Lb) 72.2 81.9 (11.8)
Zinc (US Cts/Lb) 36.0 46.3 (22.2)
Plata (Dlls/Oz) 4.5 4.5 -
Oro (Dlls/Oz) 290.4 263.5 10.2
Molibdeno (US Dlls/Lb) 2.7 2.3 17.4
Plomo (US Cts/Lb) 22.3 22.4 (0.4)
Operating earnings during first quarter 2002 were $52.9 million dollars, 120% compared with the same period of the previous year, due basically to a significant reduction in production costs as well as savings in administrative and depreciation costs. EBITDA for the first quarter of 2002 was $98.6 million dollars, representing an increase of 28% compared to the $77.2 million in the same period of 2001. Net financing costs Net financing cost Also called the cost of carry or, simply carry, the difference between the cost of financing the purchase of an asset and the asset's cash yield. Positive carry means that the yield earned is greater than the financing cost; negative carry means that the in the first quarter of 2002 were $48.6 million dollars, 17% less than the $58.8 million of the same period of 2001. Income before taxes and extraordinary items for the first quarter of 2002, was $4.5 million versus a loss of $38.5 million reported in the same period of 2001, representing an increase of 112%. Taxes generated during the first three months of 2002, were equivalent to $18.8 million dollars, 231% more than the first quarter of 2001 of $5.7 million dollars, due basically to an increase in the asset tax and in the deferred taxes in the Mexican mining subsidiaries of AMC. Extraordinary items reported in the first three months of 2002 of $16.0 million include the premium of $11.4 million paid to the owners of SPCC Secured Export Notes who were repaid during February February: see month. 2002. The net loss after taxes and extraordinary items for the first quarter of 2002 was $36.5 million dollars, representing a decrease of 32% against the same period of 2001. Operating cash break even point in terms of pounds of copper for the three months ended March 31, 2002, was 53.7 US dollars cents., 28% less than the 68.7 cents reported during the same period of last year. Total cash break even point in terms of pounds of copper (includes operating cost, financing expenses, tax expenses, and capex), for the three months ended March 31, 2002, was 75.1 US dollars cents., 25% less than the 93.9 cents reported during the same period of the previous year.
Minera Mexico (MM)
MM-Highlights
(Stated in thousands of US dollars - US GAAP)
Financial Data
Three Months ended:
March 31 March 31 Var.
2002 2001 %
Net Sales 201,577 248,717 (19.0)
Cost of Sales 154,371 191,990 (19.6)
Administrative Expenses 11,331 11,429 (0.9)
Operating Income 12,502 24,489 (48.9)
EBITDA 35,876 45,298 (20.8)
Financing Costs (net) 26,204 30,556 (14.2)
Net Loss (Majority) (30,166) (7,679) (292.8)
MM-Sales
Production Sold
3 Months 3 Months
ended ended Var
31/Mar/02 31/Mar/01 %
Copper (TM) 82,039 8,594 (7.4)
Zinc (TM) 33,603 35,565 (5.5)
Silver (Kg) 105,831 140,948 (24.9)
Gold (Kg) 178 393 (54.7)
Molybdenum (TM) 848 1,811 (53.2)
Lead (TM) 7,242 6,702 8.1
Metals Market Prices
3 Months 3 Months
ended ended Var
31/Mar/02 31/Mar/01 %
Copper (US Cts/Lb) 72.2 81.9 (11.8)
Zinc (US Cts/Lb) 36.0 46.3 (22.2)
Silver (Dlls/Oz) 4.5 4.5 0
Gold (Dlls/Oz) 290.4 263.5 10.2
Molybdenum (US Dlls/Lb) 2.7 2.3 17.4
Lead (US Cts/Lb) 22.3 22.4 (0.4)
Sales in the first quarter were $201.6 million dollars, 19% lower than the first quarter of 2001, due to the fact that international market prices for copper and zinc were 12% and 22% lower respectively. In addition, sales volumes were lower in the first quarter as a result of significantly reduced purchases of metals from third parties and the impact on production from labor strikes at the La Caridad, San Martin and Charcas Charcas (chär`käs), Spanish colonial audiencia and presidency in South America, known also as Upper Peru and Chuquisaca. Charcas roughly corresponded to modern Bolivia but included parts of present Argentina, Chile, Peru, and Paraguay, mining units and the San Luis Potosi zinc electrolytic plant. The company reinforced its current strategy of emphasizing cost reductions and efficiency of operations, sacrificing production in order to maximize operating cash flow. As a result of this action, costs and total expenses were reduced by 19% in the first quarter of 2002. These savings allowed the company to reduce the base operating break-even point break-even point - In the process of implementing a new computer language, the point at which the language is sufficiently effective that one can implement the language in itself. in the first quarter of 2002 to 52.4 cents per pound of copper produced from 58.7 cents per pound in the same period of 2001. The base total break-even point per pound of copper (including operating costs operating costs npl → gastos mpl operacionales , interest, taxes and capital investments) was 77.3 cents compared to 95.4 cents in the first quarter of the previous year. EBITDA for the three months ended March 31, 2002, increased to $35.9 million despite the drop in metals prices and the labor problem. This figure is especially strong in comparison to EBITDA results of the third and fourth quarters of the previous year, which were $8.3 million and ($4.2) million respectively. The above mentioned have allowed MM to decrease the base operating break-even point in the first quarter of 2002 to 52.4 cents per pound of copper produced from 58.7 cents per pound in the same period of 2001. The base total break-even point per pound of copper (including operating costs, interest, taxes and capital investments) was 77.3 cents compared to 95.4 cents in the first quarter of the previous year.
Asarco Incorporated
Asarco-Highligths
(Stated in thousands of US dollars - US GAAP)
Financial Data
Three Months ended:
March 31 March 31 Var.
2002 2001 %
Net Sales 138,130 265,689 (48.0)
Cost of Sales 113,830 275,037 (58.6)
Administrative Expenses 7,752 9,449 (18.0)
Operating Income 10,430 (30,240) 134.5
EBITDA 16,548 (18,797) 188.0
Financing Costs (net) 17,292 24,013 (28.0)
Net Loss (Majority) (7,028) (54,304) 87.1
Asarco-Sales
Production Sold
3 Months 3 Months
ended ended Var
31/Mar/02 31/Mar/01 %
Copper (MT) 73,543 102,670 (28.4)
Zinc (MT) 4,246 12,712 (66.6)
Silver (Kg) 35,269 165,557 (78.7)
Gold (Kg) 246 2,109 (88.3)
Lead (TM) 0 9,343 (100.0)
Metals Market Prices
3 Months 3 Months
ended ended Var
31/Mar/02 31/Mar/01 %
Copper (US Cts/Lb) 72.2 81.9 (11.8)
Zinc (US Cts/Lb) 36.0 46.3 (22.2)
Silver (Dlls/Oz) 4.5 4.5 0
Gold (Dlls/Oz) 290.4 263.5 10.2
Lead (US Cts/Lb) 22.3 22.4 (0.4)
Production of copper concentrates at Asarco mines increased by 22% in the first quarter of 2002 compared to the first quarter of 2001. The Mission mine in Arizona Arizona (âr'əzō`nə), state in the southwestern United States. It is bordered by Utah (N), New Mexico (E), Mexico (S), and, across the Colorado R., Nevada and California (W). , operating at 32% of milling capacity in accordance with its new mine plan, produced 10,242 metric tons of copper in concentrates during the first quarter of 2002. While this represents a decrease of 27% from the same period of the previous year, the operation increased copper recovery by 12%. The Ray mining complex increased production of copper concentrates by 51%, producing 36,228 metric tons, due primarily to improved ore grades Ore grade is a measure that describes the concentration of a valuable natural material (such as metals or minerals) in its surrounding ore. Ore grade is used to assess the economic feasibility of a mining operation: the cost of extracting a natural material from its ore is directly , a new mine plan and the optimization optimization Field of applied mathematics whose principles and methods are used to solve quantitative problems in disciplines including physics, biology, engineering, and economics. of installed capacity. Production of copper at Asarco mines totaled 61,121 metric tons during the first quarter of 2002, an increase of 13% over the 54,060 metric tons produced in the same period of the previous year. Zinc and lead operations were closed temporarily during 2001 due to lower metals prices and as part of our strategy to improve our cost of production instead of increasing volumes. Production of gold and silver were similarly affected. First quarter sales were 48% lower than sales for the same period in 2001. This reduction is attributed to less production of copper provided by third parties, as well as the reduction in the average price of copper during the quarter by 9.7 cents per pound, which represents a decrease of 12%. Production costs were reduced in effect by 40% during the first quarter of 2002 in comparison to the same period of 2001, due primarily to the continued application of cost reduction programs implemented at all units, as well as the reduction in volumes produced. Cost of sales was 59% less during the first quarter of 2002 compared to the same period of 2001, due to items explained above and due to a reduction in purchases of metals from third parties. EBITDA generated during the first quarter of 2002 increased to $16.5 million compared to a loss of $18.8 million in the first quarter of 2001, representing an improvement of $35 million in EBITDA. This significant improvement in results was obtained despite a 12% lower copper price. Other significant factors in the improvement of results included: the temporary closure of operations with high production costs and the optimization of all mining operations. These savings have allowed Asarco to decrease the base operating break-even point in the first quarter of 2002 to 62.0 cents per pound of copper produced from 90.2 cents per pound in the same period of 2001. The base total break-even point per pound of copper (including operating costs, interest, taxes and capital investments) was 75.5 cents compared to 108.1 cents in the first quarter of the previous year.
RAILROAD DIVISION
Grupo Ferroviario Mexicano (GFM)
GFM-Highlights
(Expressed in thousands of US dollars - US GAAP)
Financial Data
Three Months ended:
March 31 March 31 Var.
2002 2001 %
Net Sales 148,014 121,059 22.3
Cost of Sales 88,164 81,000 8.8
Administrative Expenses 6,463 5,750 12.4
Operating Income 31,139 15,141 105,7
EBITDA 53,387 34,308 55.6
Financing Costs (net) 400 1,426 (71.9)
Net Income (Majority) 24,205 12,580 92.4
During the first quarter of 2002, accumulated ac·cu·mu·late v. ac·cu·mu·lat·ed, ac·cu·mu·lat·ing, ac·cu·mu·lates v.tr. To gather or pile up; amass. See Synonyms at gather. v.intr. To mount up; increase. transport volumes increased 9.8% with respect to the same period of 2001. The sectors that showed significant variations during the period included: minerals, with an increase of 110.8%; automotive, with and increase of 75.4 percent; chemicals, with an increase of 10.4%. In addition, the following segments had the largest decreases: oil at 24.9%; and metals at 27.7%. Income from railroad transport services The collective functions of layers 1 through 4 of the OSI model. in the first quarter of 2002 increased to $148 million compared to $121.1 million in the same period last year, equivalent to a 22% increase, as a result of higher transport volumes. With respect to investment projects and acquisition of other assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. , Grupo Ferroviario spent $10.7 million during the first quarter of 2002 on construction, expansion and rehabilitation rehabilitation: see physical therapy. of tracks, terminals, rail yards, bridges, tunnels and sewers, and on the acquisition of telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. systems. These investments are part of an integral, planned investment program of $700 million dollars, which to date is 65% completed. Simultaneously, the company continues with implementation of a long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. modernization program for all of its railroad routes in conjunction with the railroad workers union. The program will permit the company to increase transport volumes, will improve a new generation of employees, and will update technology to place it on levels similar to other railroad lines throughout the world. In accordance with US GAAP, first quarter EBITDA for GFM was $53.4 million dollars, which represented 36.1% of sales and compares with EBITDA of $34.3 million in the same period last year. This is an increase of 55.6%. |
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