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 MANDALUYONG, Metro Manila, Philippines, Nov. 19 /PRNewswire/ -- Benguet Corporation (NYSE: BE) released its third quarter results which were described as quite encouraging as the company's operations managed to yield modest net earnings compared with the losses for the same period a year ago.
 On its debt problem, the company disclosed that to date, the Memorandum of Agreement to pave the way for the formal implementation of the company's loan restructuring program has been signed by 22 of the 23 creditor banks and financial institutions representing 99.33 percent of the P4.338 billion total outstanding loans of the company as of Sept. 30, 1993.
 Consolidated Results
 Net earnings for the third quarter amounted to P1,400,000 (US$46,000) or P0.01 (US$0.004) per share, compared with the net loss of P103,900,000 or P0.91 per share for the same quarter in 1992. For the nine-month period, net earnings amounted to P324,3000,000 (US$10,879,000) or P2.85 (US$0.095) per share, provided primarily by extraordinary gains of P698,000,000 (US$23,413,000) from sale of Benguet's stockholdings in EEI Corporation and real estate properties, compared with a net loss of P58,300,000 or PO.51 per share for the same period in 1992.
 Operating revenue for the third quarter amounted to P864,000,000 (US$28,982,000). For some time during the third quarter, prices of gold went up and even broke the US$400 per ounce level. The improvement in gold prices partly accounts for the 15 percent increase in the company's operating revenue as compared with the operating revenue of P752,100,000 for the same period last year. For the nine months period, however, operating revenue was P2,393,100,000 (US$80,272,000), which was 12 percent lower than the P2,706,100,000 operating revenue for the same period last year.
 Dizon Copper Gold Operation
 The Dizon mine earned P12,600,000 (US$424,000) in the third quarter this year, compared with the loss of P1,000,000 in 1992. An increase in copper production correspondingly lowered production cost per pound, resulting in net earnings during the quarter, although copper prices declined further to US$0.74 per pound this year from US$1.04 per pound in 1992.
 For the third quarter, 9,831,000 pounds of copper and 24,936 ounces of gold valued at US$0.74 per pound and US$353 per ounce, respectively, were produced.
 Net production cost per pound copper decreased to US$1.36 this quarter from US$2.65 last year (before gold and silver credits of US$0.93 and financial charges of US$0.05 in 1993, from US$1.39 and US$0.12 in 1992, respectively.
 Benguet Antamok Gold Operation
 Improvements in metal prices, production output and production costs have resulted in net earnings from the Benguet Antamok open pit mine for this quarter of P4,900,000 (US$166,000), as compared with the loss of P45,100,000 for the same period in 1992.
 Gold production aggregated 22,340 ounces this quarter and 63,529 ounces for the nine-month period this year. For the same periods in 1992, gold production aggregated 20,706 ounces for the quarter and 66,679 ounces for the year to date. Net production cost per ounce for the quarter averaged US$298 inclusive of non-cash charges of US$70 but before financial charges of US$87.
 Masinloc Chromite Operation
 Earnings amounted to P3,900,000 (US$130,000) this quarter, compared with the loss of P7,900,000 in 1992. This quarter's earnings reduced the net loss from the Masinloc mine for the nine-month period to P3,700,000 (US$126,000) from the loss of P14,900,000 in 1992.
 Because of the heavy rains, the underground mine was flooded and mining activities have been suspended until completion of dewatering. However, the Masinloc mine has substantially sufficient inventory of chromite products for shipment in the fourth quarter of this year.
 Benguet and Paracale Gold Operation
 The Benguet and Paracale underground mines remained suspended during the quarter. Both mines are currently in the market for potential investors either on outright sale or joint venture arrangement.
 Metal Trading
 Earnings from metal trading transactions for this quarter amounted to P12,200,000 (US$409,000) mainly from the sale of about 9.6 million pounds of copper price insurance contracts at the price of 7.27 US cents per pound vs. the purchase price of 2.16 US cents per pound. Proceeds from the foregoing sale of copper insurance were used to purchase gold price insurance for 1994 covering 67,000 ounces at the price of US$11.90 per ounce.
 As of the end of the quarter, about 19,253,708 pounds copper remain insured up to the end of 1993 at the price of US$0.98 per pound.
 Other Investments
 Benguet Management Corporation (BMC), a 100 percent-owned subsidiary of the company, and its subsidiaries reported consolidated earnings for the third quarter of P6,400,000 (US$215,000),compared with the consolidated loss of P9,100,000 for the same period in 1992.
 AsianBank Corporation (ABC) and AB Capital & Investment Corporation (ABCIC), both 28 percent-owned by the company, reported net earnings this quarter of P13,200,000 (US$444,000) and P26,900,000 (US$904,000), respectively, compared with the earnings of P10,000,000 and P20,600,000 for the same quarter in 1992.
 Petrofields Exploration & Development Co., Inc. (Petrofields), a 21 percent-owned affiliate company, reported a loss of P1,000,000 (US$35,000) this quarter compared with earnings of P4,000,000 in 1992.
 Monte de Piedad and Savings Bank (MPSB), a 20 percent-owned affiliate company, reported earnings of P19,200,000 (US$645,000) this quarter.
 On the KingKing Copper Gold Project, results of the metallurgical tests being conducted by K&D Engineering of Tucson, Ariz., are still pending. Parallel tests are also being conducted at the mine site to determine the characteristics of the oxide ore from the KingKing claims. A number of proposals have been received by the company from parties that have signified serious interest in the project.
 Value Added Tax Claims
 Benguet has outstanding claims for refund of P552 million paid as value added tax. To date, P25.3 million has been allowed on such refund claims. Benguet is actively pursuing such claims.
 Debt Restructuring Program
 The basic terms and conditions of the restructuring program under the memorandum of agreement provide payment of almost half of the loans and the remaining balance, which shall be restructured, shall have a grace period of 12 months from Sept. 30, 1993, after which grace period loan repayments shall commence in semiannual amortizations of 3-1/2 to 4-1/2 years. Interest payable quarterly shall be at 2-1/2 percent over 91-day treasury bill or LIBOR rates, whichever is applicable. The restructured loans shall be secured by a mortgage trust indenture over all of the company's existing assets. With the reduction of the loans and corresponding interest and financing costs, some relief to the company's operations is expected.
 Bankers Trust Company, the company's financial adviser on this matter, is confident that the restructuring program can be put in effect by the end of this year.
 In November, after the close of the third quarter, Benguet sold its principal office building for a winning bid of P803.1 million. The net profits on the sale of the Benguet Centre, as well as on the impending sale of Benguet's shares in the AsianBank Group and MPSB with a combined value of well over a billion pesos, in addition to the more than P903 million cash already available in an escrow account, will be used to pay off a substantial part of the company's outstanding bank loans.
 The gold price fundamentals remain positive and can thus sustain recovery over the medium term. On the other hand, copper prices could continue to be depressed due to the weak copper demand brought about by the continuing worldwide recession. Up to the end of this year, however, the company is adequately protected by copper price insurance.
 A proposed new mining code of the Philippines is currently being deliberated in Congress. If finally passed, this law will provide the industry with additional incentives that could help reduce cost of production and also encourage foreign investors to come in and provide fresh capital for the country's mining development programs.
 In Thousands (Except Per Share Data)
 Three Months Ended
 Sept. 30,
 Operating Revenue P 864,000 P 752,100
 Operating Profit (Loss) 119,400 ( 136,100)
 Other Income
 (Expenses) Net ( 118,000) 32,200
 Net Income (Loss)(a) P 1,400 (P 103,900)
 Earnings Per Share (b) P 0.01 (P 0.91)
 Operating Revenue $ 28,982 $ 29,942
 Operating Profit (Loss) 4,005 ( 5,417)
 Other Income
 (Expenses)) Net ( 3,959) 1,280
 Net Income (Loss)(a) $ 46 ( 4,137)
 Earnings (Loss)
 Per Share (b) $ 0.0004 ($ 0.036)
 Nine Months Ended
 Sept. 30,
 Operating Revenue P 2,393,100 P2,706,100
 Operating Profit (Loss) 211,300 ( 42,900)
 Other Income
 (Expenses)Net 113,000 ( 15,400)
 Net Income (Loss)(a) P 324,300 (P 58,300)
 Earnings (Loss)
 Per Share (b) P 2.85 (P 0.51)
 Operating Revenue $ 80,272 $ 107,726
 Operating Profit (Loss) 7,090 ( 1,707)
 Other Income
 (Expenses)) Net 3,789 ( 614)
 Net Income (Loss)(a) $ 10,879 ($ 2,321)
 Earnings (Loss)
 Per Share (b) $ 0.095 ($ 0.020)
 (a) Deferred income tax is computed on a partial application basis, while unrealized foreign exchange losses are deferred and amortized to coincide with the actual repayment of outstanding currency obligations. The effect of these methods is to increase the net income by P190,100,000 (US$6,375,000) for the third quarter and by P249,400,000 (US$8,367,000) for the first nine months of 1993. In 1992, the effect is to decrease net loss by P25,400,000 (US$1,011,000) for the third quarter and for the first nine months of 1992.
 (b) Earnings per share are based on the weighted average number of common shares outstanding.
 (c) Benguet is a Philippine corporation, and its books of accounts are kept in Philippine pesos. U.S. dollar figures are shown purely for convenience and were computed based on the interbank guiding rate at Sept. 30 of P29.81 to US$1.00 in 1993 (P25.12 to US$1.00 in 1992).
 -0- 11/19/93
 /CONTACT: Robert V. Schnabel, U.S. counsel, for Benquet, 202-638-2241/

CO: Benquet Corporation ST: IN: MNG SU: ERN

DC-IH -- DC007 -- 6478 11/19/93 11:11 EST
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Publication:PR Newswire
Date:Nov 19, 1993

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