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BENGUET REPORTS FIRST QUARTER LOSS

 MANDALUYONG, Metro Manila, May 21 /PRNewswire/ -- Benguet Corporation (NYSE: BE) today reported it lost P107,000,000 (US$4,193,000) in the first quarter of 1993, or P0.94 (US$0.037) per share, in contrast to earnings of P28,600,000 (US$1,120,000), or P0.25 (US$0.010) per share, in the first quarter of 1992. Operating revenue this quarter amounted to P745,700,000 (US$29,228,000), 19 percent lower than revenues of P922,000,000 in the same 1992 period. The reduced revenues were the result of lower metal prices and reduced production volume and were insufficient to cover financing charges. The mining losses were partially offset by Benguet's share in earnings of subsidiaries and affiliates.
 Debt Crisis
 In late March Benguet's Board declared a moratorium on payment of interest and principal on its bank debt, following the refusal of one bank to renew a sizable credit facility previously extended to Benguet. Benguet then retained Bankers Trust Company to advise it on this matter. While it had been expected that some resolution of the problem would have occurred by now, Bankers Trust is still working with a steering committee created by the creditor banks to come up with a solution. Current efforts are to provide the creditor banks with security, and to sell non-mining assets in order to pay down the loan balances. The creditors' steering committee has indicated that most of the creditor banks believe they will be able to reinstate Benguet's loan facilities if agreement is reached along these lines. Improvements in the price of gold and in the dollar to peso exchange rate should also help in overcoming the debt situation.
 Dizon Copper-Gold Operation
 The Dizon mine earned P4,000,000 (US$156,000) this quarter, 65 percent lower than earnings of P11,300,000 in the same 1992 quarter. Production this quarter was 8,993,000 pounds of copper and 26,921 ounces of gold valued at US$0.85 per pound copper and US$340 per ounce gold. Production in the equivalent 1992 quarter was 7,488,000 pounds of copper and 25,345 ounces of gold valued at US$1.00 per pound copper and US$342 per ounce gold. Production costs were reduced to $1.63 per pound copper, from US$1.79 last year, while credits for gold/silver were also reduced to $1.03 this year from US$1.16 last year. A major reduction in force at the Dizon mine reduced the work force from 1,723 to 1,147. In addition, the second phase of the crushing plant was completed, so that production can be increased. Waters flooding the employee living area have been reduced by the construction of a channel to divert the water from the lahar flow from Mt. Pinatubo.
 Benguet Antamok Gold Operation
 The Antamok open pit mine incurred a loss of P47,800,000 (US$1,872,000) this quarter, after adjustment for prior year's revenues, compared with earnings of P6,900,000 in 1992's first quarter. Gold production this quarter was down 11 percent to 20,655 ounces, from 23,218 ounces in 1992 due to lower ore grade and milling tonnage. Production cost was up to US$315 per ounce, compared with US$271 per ounce in 1992, and financing charges were $84 per ounce of gold in 1993 against $61 in 1992. Changes have been made in this mine's management in an effort to improve results.
 Masinloc Chromite Operation
 Shipments were up 24 percent in 1993's first quarter over the similar 1992 quarter, and the loss in 1993 was P5,000,000 (US$195,000) against a loss of P5,300,000 in 1992. In an effort to cut costs, the work force at this mine has been reduced from 584 at the start of 1993 to 310 at present. Benguet is developing the Zambales Mineral (Chromite) Reservation which was awarded to it by the government, and expects production from the Reserve to start later this year.
 Underground Gold Mines Phased Out
 The closure of the Benguet underground mines was substantially completed this quarter at a cost of P49,300,000 (US$1,932,000), mostly for separation pay of terminated employees. The mines will be maintained under caretaking arrangements for the time being. The Paracale mines were closed prior to 1993, but during the first quarter of 1993 the Paracale mill operated to process purchased tailings, and incurred a loss of P16,600,000 (US$651,000), 30 percent lower than the loss of P23,800,000 in 1992's first quarter. Both mines are being held available for sale or joint venturing.
 Value Added Tax Claims
 The company's outstanding claims for value-added tax credit are still pending before the Tax Court and the Bureau of Internal Revenue, substantially as they were at the end of 1992. As of the end of the quarter, the company's claims consisted of about P264 million on gold sold to the Philippine Central Bank which are under judicial review and P259 million (up from P239 million at the end of 1992) related to direct exports which are subject only to administrative review by the Bureau of Internal Revenue. To date, the company has been granted P25.3 million (unchanged since the close of 1992) value added tax credits for direct export shipments covering the first two quarters of 1991.
 Subsidiaries and Affiliates
 Benguet Management Corporation, a 100-percent-owned subsidiary, reported profit of P4,700,000 (US$185,000), vs. a loss of P8,600,000 in the first quarter of 1992. Earnings were mainly from foundry operations. BenguetCorp International lost P1,000,000 (US$40,000) against a loss of P700,000 in the first quarter of 1992. EEI Corporation, in which Benguet has a 32 percent interest, reported earnings of P41,400,000 (US$1,623,000) for the quarter, up 23 percent from the P33,800,000 reported in the same quarter of 1992, mostly from continuing manpower supply operations in the Middle East. Petrofields Exploration & Development Co., Inc., a 21-percent-owned affiliate, reported earnings of P2,200,000 (US$87,000) this quarter, compared to a loss of P50,000 reported in the same quarter of 1992. AsianBank Corporation, 28-percent-owned by Benguet, reported net earnings of P23,600,000 (US$926,000) this quarter, up 12 percent over comparable earnings of P21,200,000 in 1992. AB Capital & Investment Corporation, also 28-percent-owned by Benguet, earned P35,900,000 (US$1,408,000), an increase of 29 percent over earnings of P27,700,000 in 1992. Monte de Piedad & Savings Bank, 20-percent-owned by Benguet, earned P11,200,000 (US$438,000) this quarter, 85 percent higher than the earnings of P6,000,000 reported a year ago.
 Kingking Copper-Gold Project
 An in-house preliminary feasibility study based on Phase I exploration work results has been completed. Exploration results place the estimated total potential of the project at 315 million tons, with an average grade of 0.44 percent copper and 0.52 grams of gold per ton. A number of parties have signified interest in working with Benguet on this project. This interest should help Benguet develop the property without incurring the debt it would incur were it to develop the property without other parties.
 Outlook
 The increase in the price of gold to over $360 per ounce, and the increase in the peso/dollar exchange rate to almost 27 to 1 will be beneficial to Benguet revenues should they continue. While the copper price has recently gone below US$0.83 per pound, Benguet will not be affected this year because it is protected by a copper price insurance cover pegged at US$0.98 per pound. These better prices, together with continuing efforts to sell nonessential assets, should provide needed ability to cover interest costs, and even pay down debt. Benguet's management is looking forward to better cash flow and profitability if current conditions continue.
 BENGUET CORPORATION AND SUBSIDIARIES
 Unaudited Consolidated Results of Operations
 In Thousands (Except Per Share Data)
 Three Months Ended
 March 31,
 PHILIPPINE PESOS 1993 1992
 Operating Revenue P 745,700 P 922,000
 Operating Profit (Loss) ( 800) 48,600
 Other Expenses -- Net ( 106,200) ( 20,000)
 Net Income (Loss)(A) (P 107,000) P 28,600
 Earnings (Loss)
 Per Share(B) (P 0.94) P 0.25
 U.S. DOLLARS(C)
 Operating Revenue $ 29,228 $ 36,083
 Operating Profit (Loss) ( 30) 1,901
 Other Expenses -- Net ( 4,163) ( 781)
 Net Income (Loss)(A) ($ 4,193) $ 1,120
 Earnings (Loss)
 Per Share(B) ($ 0.037) $ 0.010
 (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 decrease net loss by P11,000,000 (US$430,000) in 1993 (nil in 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 are computed based on the interbank guiding rate at March 31 of P25.51 to US$1.00 in 1993 (P25.55 to US$1.00 in 1992).
 -0- 5/21/93
 /CONTACT: Robert V. Schnabel, U.S. counsel, Benguet Corporation, 202-638-2241/
 (BE)


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

MH -- DC006 -- 1161 05/21/93 11:13 EDT
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Date:May 21, 1993
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