Printer Friendly

INCO LIMITED REPORTS A LOSS FOR 1992 OF $17.6 MILLION (U.S.) ON LOWER NICKEL PRICES - FOURTH-QUARTER LOSS WAS $28.9 MILLION (U.S.)

 /NOTE: All dollar amounts are expressed in United States currency/
 TORONTO, Feb. 3 /PRNewswire/ -- Inco Limited announced today its unaudited results for 1992. The Company incurred a net loss of $17.6 million for the year 1992, compared with net earnings of $82.6 million for 1991. Results for the fourth quarter of 1992 were a loss of $28.9 million, compared with a loss of $5.8 million in the fourth quarter of 1991. Fourth quarter and year 1992 results reflected a continued decline in the price of nickel, a key determinant of the Company's profitability, as high levels of nickel exports from Russia and reduced demand in some nickel-consuming countries resulted in an oversupply of nickel. The Company's realized nickel price averaged $3.01 per pound in the fourth quarter of 1992, down 15 percent from the $3.55 per pound realized in the fourth quarter of 1991, and was $3.38 per pound in 1992, down 12 percent from the $3.84 per pound realized in 1991.
 Results for the fourth quarter and year 1992 included production shutdown expenses of $9.7 million after tax associated with the December shutdowns at the Company's primary metals operations in Canada, and severance costs of $8.1 million after tax associated with the voluntary early retirement incentive program announced by the Company in November.
 Net earnings for the year 1991 included severance costs of $31.1 million after tax, of which $17.3 million was recorded in the fourth quarter, associated with the voluntary early retirement incentive programs at the Company's Sudbury District and United Kingdom operations, and also included a tax benefit of $31 million, recorded in the fourth quarter, as a result of the contractual transfer to the Government of Guatemala of a 30 percent common equity interest in the Company's Guatemalan subsidiary.
 The actions announced in October 1992 to reduce mine production and unit production costs, and to conserve cash, and the initiatives announced in November 1992 to reduce and restructure the Company's workforce in Canada and the United States will have a continuing positive impact on the Company's financial results. Capital expenditures were $234 million in 1992, down from $440 million in 1991, and are expected to be about $225 million in 1993. In the primary metals business, nickel unit production costs were 14 percent lower in the fourth quarter of 1992 than in the fourth quarter of 1991, reflecting the favorable trend which began in the first quarter of 1992. In the alloys and engineered products business, employment levels were reduced in 1992 and the Company continues to pursue and adopt initiatives to further reduce costs to a level which, initially, should permit this business to break even under today's difficult conditions and, over time, provide for a return to profitability.
 INCO LIMITED
 Consolidated results
 (in millions)
 Earnings (Loss)
 Net Earnings (Loss) Per Common Share
 1992 1991 1992 1991
 First Quarter $ 2.2 $ 53.6 $ .01 $ .50
 Second Quarter (1.5) 30.3 (.03) .28
 Third Quarter 10.6 4.5 .09 .03
 Fourth Quarter (28.9) (5.8) (.28) (.07)
 Year $(17.6) $ 82.6 $(.21) $ .74
 Net sales to customers
 (in millions)
 Fourth Quarter Year
 1992 1991 1992 1991
 Primary Metals $469 $538 $1,955 $2,302
 Alloys and Engineered
 Products 131 154 557 653
 Other Business 12 11 47 44
 Net sales $612 $703 $2,559 $2,999
 Operating results
 (in millions)
 Fourth Quarter Year
 1992 1991 1992 1991
 Primary Metals $ 2 $ (5) $162 $268
 Alloys and Engineered
 Products (11) (5) (29) 4
 Other Business 4 (2) 16 10
 Eliminations 3 4 7 4
 Operating earnings (loss) $ (2) $ (8) $156 $286
 Operating results comprise earnings (losses) before income and mining taxes, interest expense, general corporate income and expenses, minority interest, and currency translation adjustments.
 The improved operating results in the Company's primary metals business in the fourth quarter of 1992, compared with the fourth quarter of 1991, reflected lower unit production costs and expenses, partially offset by lower realized prices for nickel and copper. Relative to the year 1991, year 1992 results declined principally due to lower realized prices for nickel, copper and precious metals, offset partially by lower unit production costs and expenses and higher cobalt prices. Fourth quarter and year 1992 results included production shutdown expenses of $20.6 million associated with the December shutdowns and severance costs of $15.7 million, whereas year 1991 results included severance costs of $43.8 million of which $24.4 million was recorded in the fourth quarter. The improvement in unit production costs in 1992 reflected reduced employment costs, higher ore grades and the reduced value of the Canadian dollar relative to the U.S. dollar.
 Sales and cost of sales reflected deliveries of 72 million pounds of purchased nickel in 1992 as compared with 117 million pounds in 1991. The Company's finished nickel inventories were 49 million pounds at Dec. 31, 1992, compared with 45 million pounds at Dec. 31, 1991.
 The Company's average realized prices per pound of nickel, including intermediates, and copper were as follows:
 Primary Nickel Refined Copper
 1992 1991 1992 1991
 First Quarter $3.59 $3.94 $ .99 $1.10
 Second Quarter $3.48 $3.97 $1.04 $1.05
 Third Quarter $3.47 $3.90 $1.14 $1.02
 Fourth Quarter $3.01 $3.55 $1.00 $1.07
 Year $3.38 $3.84 $1.03 $1.07
 The Company's deliveries of primary metals are shown below:
 (in millions)
 Fourth Quarter Year
 1992 1991 1992 1991
 Nickel in all forms (pounds) 122 125 473 507
 Copper (pounds) 70 70 244 254
 (in thousands)
 Platinum-group metals
 (troy ounces) 110 91 314 332
 Gold (troy ounces) 9 23 40 76
 Silver (troy ounces) 410 270 1,400 1,350
 Cobalt (pounds) 970 970 3,090 3,070
 The decrease in operating results in the Company's alloys and engineered products business in the fourth quarter and year 1992, compared with the corresponding 1991 periods, was due to lower average selling prices for alloys, offset partially by lower processing costs. Operating results for the year also reflected lower deliveries. Year 1992 results reflected provisions for severance costs of $2.5 million, compared with $5.8 million in 1991.
 The increase in operating results in the Company's other business in the fourth quarter and year 1992, compared with the corresponding 1991 periods, reflected improved performance by The International Metals Reclamation Company, a wholly owned subsidiary and a leader in recycling industrial wastes, and a higher contribution from TVX Gold Inc., in which the Company has a 62 percent interest.
 The Company generated a cash surplus, before financing activities, of $167 million during 1992, including $130 million in the fourth quarter, compared with cash shortfalls of $172 million and $20 million, respectively, in the corresponding periods of 1991. Capital expenditures were $234 million in 1992, including $89 million in the fourth quarter, compared with $440 million and $63 million, respectively, in the corresponding periods of 1991. During 1992, the Company received $91 million from the sale of certain of its accounts receivable, including $51 million in the fourth quarter of 1992. The cash surplus generated in the fourth quarter of 1992 also included a reduction in inventories of $98 million which resulted from lower costs and reduced quantities. At Dec. 31, 1992, the Company had total debt of $1,141 million, down from $1,270 million at Dec. 31, 1991, and its debt:equity ratio was 41:59.
 INCO LIMITED AND SUBSIDIARIES
 CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
 (U.S. dollars in millions -- Unaudited)
 Fourth Quarter Year
 1992 1991 1992 1991
 Net sales $611.9 $703.0 $2,558.9 $2,999.2
 Other income 14.9 7.3 52.2 50.1
 Total 626.8 710.3 2,611.1 3,049.3
 Cost of sales and operating
 expenses 573.8 662.6 2,243.3 2,541.4
 Selling, general and
 administrative expenses 43.9 49.0 165.2 170.0
 Research and development 10.1 16.0 45.7 54.2
 Exploration 5.9 8.2 33.0 39.7
 Interest expense 28.4 30.0 112.8 119.7
 Currency translation
 adjustments (3.2) (2.9) (11.1) 2.8
 Total costs and expenses 658.9 762.9 2,588.9 2,927.8
 Earnings (loss) before taxes
 and minority interest (32.1) (52.6) 22.2 121.5
 Income and mining taxes (8.6) (52.4) 20.8 14.5
 Earnings (loss) before ------ ------ ------- -------
 minority interest (23.5) (0.2) 1.4 107.0
 Minority interest 5.4 5.6 19.0 24.4
 Net earnings (loss) (28.9) (5.8) (17.6) 82.6
 Dividends on preferred
 shares (1.2) (1.2) (4.7) (5.0)
 Net earnings (loss)
 applicable to common
 shares $(30.1) $ (7.0) $ (22.3) $ 77.6
 Net earnings (loss) per
 common share $(0.28) $(0.07) $ (0.21) $ 0.74
 Common shares outstanding
 (weighted average, in
 thousands) 109,123 105,987 108,299 105,289
 INCO LIMITED AND SUBSIDIARIES
 CONDENSED CONSOLIDATED BALANCE SHEET
 (U.S. dollars in millions -- Unaudited)
 December 31,
 1992 1991
 Cash and securities $ 34.9 $ 31.1
 Accounts receivable 261.3 409.0
 Tax refunds receivable 93.8 132.3
 Inventories 716.2 844.4
 Prepaid expenses 13.0 15.4
 Deferred taxes 20.4 17.2
 Total current assets 1,139.6 1,449.4
 Property, plant and equipment,net 2,576.1 2,598.1
 Other assets and deferred charges 445.6 447.3
 Total $4,161.3 $4,494.8
 Notes payable $ 1.9 $ 74.4
 Long-term debt due within one year 58.2 205.3
 Accounts payable 438.3 582.3
 Income taxes payable 43.6 79.5
 Total current liabilities 542.0 941.5
 Long-term debt 1,081.0 990.7
 Deferred taxes 480.5 409.4
 Pension benefits 106.2 125.2
 Minority interest 274.2 281.1
 Other liabilities and deferred credits 6.8 12.9
 Preferred shares 62.6 65.8
 Common shareholders' equity 1,608.0 1,668.2
 Total $4,161.3 $4,494.8
 INCO LIMITED AND SUBSIDIARIES
 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
 (U.S. dollars in millions -- Unaudited)
 Year
 1992 1991
 Operating activities
 Earnings before minority interest $ 1.4 $ 107.0
 Charges (credits) not affecting cash
 Depreciation and depletion 252.6 234.6
 Deferred income and mining taxes 76.2 70.9
 Other - net (9.8) (30.3)
 Decrease (increase) in non-cash working
 capital related to operations 133.6 (82.8)
 Contributions to pension plans in
 excess of accruals (2.4) (9.5)
 Cash provided by operating activities 451.6 289.9
 Investment activities
 Capital expenditures (234.2) (439.6)
 Other - net (50.8) (22.6)
 Cash used for investment activities (285.0) (462.2)
 Cash surplus (shortfall) before financing
 activities 166.6 (172.3)
 Financing activities
 Net increase (decrease) in borrowings (122.8) 223.3
 Common shares issued 85.3 54.0
 Dividends paid to minority interest (26.0) (31.2)
 Dividends paid (96.7) (110.3)
 Other - net (2.6) (2.8)
 Cash provided by (used for) financing
 activities (162.8) 133.0
 Increase (decrease) in cash and marketable
 securities $ 3.8 $ (39.3)
 -0- 2/3/93
 /CONTACT: Bob Purcell of Inco Limited, 416-361-7758/
 (N)


CO: Inco Limited ST: Ontario IN: MNG SU: ERN

LR -- NY066 -- 2477 02/03/93 14:09 EST
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Feb 3, 1993
Words:1898
Previous Article:WASTE MANAGEMENT INTERNATIONAL PLC ANNOUNCES FOURTH QUARTER AND FULL YEAR PROFITS FOR 1992
Next Article:USX CORPORATION TO REDEEM SINKING FUND DEBENTURES DUE 2001
Topics:


Related Articles
Nickel producers taking aim at their labor and hydro costs.
P.T. INTERNATIONAL NICKEL INDONESIA REPORTS THIRD QUARTER 1993 LOSS OF US$0.4 MILLION AND NINE MONTHS 1993 EARNINGS OF US$8.5 MILLION
INCO LIMITED REPORTS THIRD QUARTER 1993 EARNINGS OF $91.2 MILLION (U.S.); NINE-MONTHS 1993 EARNINGS WERE $66.4 MILLION (U.S.)
P.T. INTERNATIONAL NICKEL INDONESIA REPORTS EARNINGS FOR 1993 OF $10.9 MILLION (U.S.) AND FOURTH QUARTER EARNINGS OF $2.4 MILLION (U.S.)
INCO LIMITED ANNOUNCES COST REDUCTION AT ITS PRIMARY METALS OPERATIONS
INCO LIMITED REPORTS A FIRST QUARTER NET LOSS OF $60.0 MILLION (U.S.) RESULTS INCLUDE AFTER-TAX CHARGES OF $56.0 MILLION (U.S.)
P.T. INTERNATIONAL NICKEL INDONESIA REPORTS INCREASED FIRST QUARTER 1994 EARNINGS OF $8.7 MILLION (U.S.)
P.T. INTERNATIONAL NICKEL INDONESIA REPORTS 1995 EARNINGS OF $96.0 MILLION (U.S.) MORE THAN DOUBLE 1994 EARNINGS
P.T. International Nickel Indonesia Reports First Quarter 1998 Earnings of $5.2 Million (U.S.) Reflecting Lower Nickel Prices and Adverse Weather...
Mining giants report net profit gains.

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters