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INCO LIMITED REPORTS THIRD QUARTER 1993 EARNINGS OF $91.2 MILLION (U.S.); NINE-MONTHS 1993 EARNINGS WERE $66.4 MILLION (U.S.)

 TORONTO, Oct. 25 /PRNewswire/ -- Inco Limited (NYSE: N) reported that net earnings for the third quarter of 1993 were $91.2 million, or 83 cents a common share, compared with $10.6 million, or 9 cents a share, in the third quarter of
1992. Net earnings for the first nine months of 1993 were $66.4 million, or 58 cents a share, compared with $11.3 million, or 7 cents a share, in the corresponding period of 1992. Third quarter and nine months 1993 results included a pretax gain of $186.7 million, $127.9 million after tax or $1.16 a share, from the sale of the company's 61.8 per cent interest in TVX Gold Inc. The company's realized nickel price averaged $2.60 per pound in the third quarter of 1993, a decrease of 25 per cent from the $3.47 per pound realized in the third quarter of 1992. For the first nine months of 1993, the company's realized nickel price averaged $2.83 per pound, down 19 per cent from the $3.51 per pound realized in the corresponding period of 1992.
 The increase in net earnings for the third quarter and nine months of 1993, compared with the corresponding 1992 periods, was primarily due to the gain from the sale of the company's interest in TVX Gold Inc., and from reduced costs and expenses, partially offset by significantly lower realized prices for nickel and reduced other income.
 Continued deterioration in world nickel markets was the primary factor which contributed to a decline in operating results in the Company's primary metals business. Nickel inventories on the London Metal Exchange (LME) increased to a record 260 million pounds on Sept. 30, 1993, representing about two months of Western world nickel consumption. As a result of this inventory overhang, the LME three- month nickel price, which averaged $2.16 per pound in the third quarter of 1993 and $2.52 per pound for the first nine months, declined to $1.84 per pound on Sept. 30, 1993. On Oct. 7, 1993, in response to market conditions, the company announced its intention to reduce nickel production at its Canadian operations by 60 million pounds, 40 million of which will take place in the first quarter of 1994, through production cutbacks beginning in December 1993. On Oct. 12, 1993, the company announced the specific actions it will take to reduce nickel production and also announced other measures to reduce operating costs, curtail expenditures and realize other expense reductions on a company- wide basis. Given the uncertain business environment, the company will continue to monitor market conditions on an ongoing basis to determine whether additional measures will be required.
 INCO LIMITED
 Net sales to customers
 (in millions)
 Third Quarter Nine Months
 1993 1992 1993 1992
 Primary Metals $340 $455 $1,197 $1,486
 Alloys and Engineered
 Products 116 135 380 426
 Other Business 12 11 38 35
 Net sales $468 $601 $1,615 $1,947
 Operating results
 (in millions)
 Third Quarter Nine Months
 1993 1992 1993 1992
 Primary Metals $(19) $ 72 $ 27 $ 160
 Alloys and Engineered
 Products 2 (7) (21) (18)
 Other Business -- 5 12 12
 Eliminations 4 -- 7 4
 Operating earnings (loss) $(13) $ 70 $ 25 $ 158
 Operating results comprise earnings (losses) before income and mining taxes, interest expense, general corporate income and expenses, minority interest, and currency translation adjustments.
 The decrease in operating results in the Company's primary metals business in the third quarter and first nine months of 1993, compared with the corresponding periods in 1992, was primarily due to significantly lower realized prices for nickel, together with lower prices for copper, cobalt and rhodium, partially offset by reduced unit production costs. The decrease in unit production costs was mainly due to a weakening in the Canadian dollar relative to the U.S. dollar, and reduced employment and other costs. Third quarter 1993 operating losses of $19 million, as compared to operating earnings of $31 million in the second quarter of 1993, reflected lower realized prices for nickel and copper and reduced nickel deliveries. Sales and cost of sales include deliveries of purchased nickel on which little or no profit is realized.
 The company's finished nickel inventories were 49 million pounds at Sept. 30, 1993, down from 71 million pounds at June 30, 1993, reflecting the planned vacation shutdowns which occurred in the third quarter.
 The company's average realized prices per pound of nickel, including intermediates, and copper were as follows:
 Primary Nickel Refined Copper
 1993 1992 1993 1992
 First Quarter $2.95 $3.59 $1.00 $ .99
 Second Quarter $2.93 $3.48 $ .89 $1.04
 Third Quarter $2.60 $3.47 $ .84 $1.14
 Nine Months $2.83 $3.51 $ .92 $1.05
 The Company's deliveries of primary metals are shown below:
 Third Quarter Nine Months
 1993 1992 1993 1992
 (in millions)
 Nickel in all forms (pounds) 111 112 345 351
 Copper (pounds) 42 44 180 174
 (in thousands)
 Platinum-group metals
 (troy ounces) 62 64 209 204
 Gold (troy ounces) 6 7 29 31
 Silver (troy ounces) 180 160 910 990
 Cobalt (pounds) 640 560 2,110 2,120
 The improvement in operating results in the company's alloys and engineered products business in the third quarter of 1993, compared with the third quarter of 1992, was primarily due to reduced operating costs, offset partially by lower average prices for alloys. Relative to the first nine months of 1992, operating results for the first nine months of 1993 also benefited from reduced operating costs, the impact of which was more than offset by lower average prices for alloys and a provision of $20.4 million, recorded in the first quarter, for costs associated with restructuring activities.
 The company generated a cash surplus, before financing activities, of $184.6 million during the nine months ended Sept. 30, 1993, of which $169.1 million was generated in the third quarter of 1993. The third quarter surplus included net proceeds of $287 million from the sale on July 22, 1993 of the company's interest in TVX Gold Inc. During the third quarter of 1993, the company's total debt was reduced by $131 million to $1,022 million; its debt: equity ratio at Sept. 30, 1993 was 37:63, the strongest level since 1990; cash and securities increased during the third quarter of 1993 by $65 million to $108 million.
 The board of directors today declared a quarterly dividend of 10 cents (U.S.) a common share, payable December 1 to shareholders of record on November 4. The board of directors also declared a quarterly dividend on the company's 7.85 per cent Series B Preferred Shares, payable December 1 to shareholders of record on November 4.
 INCO LIMITED AND SUBSIDIARIES
 Condensed Consolidated Statement of Earnings
 (Unaudited, U.S. dollars in millions)
 Third Quarter Nine Months
 1993 1992 1993 1992
 Net sales $ 468.0 $ 601.3 $1,614.7 $1,947.0
 Gain from sale of subsidiary 186.7 - 186.7 -
 Other income (loss), net (6.5) 6.1 11.9 37.3
 648.2 607.4 1,813.3 1,984.3
 Cost of sales and operating
 expenses 442.3 488.4 1,479.9 1,669.5
 Selling, general and
 administrative expenses 31.7 37.3 107.5 121.3
 Research and development 10.8 14.9 31.1 35.6
 Exploration 9.5 9.6 25.5 27.1
 Interest expense 24.1 28.7 75.6 84.4
 Currency translation
 adjustments (.7) (4.8) (2.0) (7.9)
 Total costs and expenses 517.7 574.1 1,717.6 1,930.0
 Earnings before taxes and
 minority interest 130.5 33.3 95.7 54.3
 Income and mining taxes 38.7 18.3 20.5 29.4
 Earnings before
 minority interest 91.8 15.0 75.2 24.9
 Minority interest .6 4.4 8.8 13.6
 Net earnings 91.2 10.6 66.4 11.3
 Dividends on preferred
 shares (1.1) (1.1) (3.2) (3.5)
 Net earnings applicable
 to common shares $ 90.1 $ 9.5 $ 63.2 $ 7.8
 Net earnings per common
 share $ 0.83 $ 0.09 $ 0.58 $ 0.07
 Common shares outstanding
 (weighted average, in
 thousands) 109,888 108,712 109,627 108,025
 INCO LIMITED AND SUBSIDIARIES
 Condensed Consolidated Balance Sheet
 (Unaudited, U.S. dollars in millions)
 September 30, December 31,
 1993 1992
 Cash and securities $ 107.8 $ 34.9
 Accounts receivable 230.0 261.3
 Tax refunds receivable 26.9 93.8
 Inventories 731.0 716.2
 Prepaid expenses 19.9 13.0
 Deferred taxes 39.8 20.4
 Total current assets 1,155.4 1,139.6
 Property, plant and equipment, net 2,529.6 2,576.1
 Other assets and deferred charges 198.0 445.6
 $3,883.0 $4,161.3
 Notes payable $ 5.5 $ 1.9
 Long-term debt due within one year 91.6 58.2
 Accounts payable 374.3 438.3
 Income taxes payable 7.5 43.6
 Total current liabilities 478.9 542.0
 Long-term debt 924.5 1,081.0
 Deferred taxes 478.4 480.5
 Pension benefits 85.3 106.2
 Minority interest 201.1 274.2
 Other liabilities and deferred credits - 6.8
 Preferred shares 61.0 62.6
 Common shareholders' equity 1,653.8 1,608.0
 $3,883.0 $4,161.3
 INCO LIMITED AND SUBSIDIARIES
 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
 (Unaudited, U.S. dollars in millions)
 Nine Months
 1993 1992
 Operating activities
 Earnings before minority interest $ 75.2 $ 24.9
 Charges (credits) not affecting cash
 Depreciation and depletion 179.0 189.7
 Deferred income and mining taxes 11.7 26.8
 Other - net (18.7) (13.7)
 Increase in non-cash working capital
 related to operations (35.1) (1.1)
 Gain from sale of subsidiary (186.7) -
 Contributions to pension plans less
 than (in excess of) accruals 7.1 (6.6)
 Cash provided by operating activities 32.5 220.0
 Investment activities
 Net proceeds from sale of subsidiary,
 net of subsidiary cash 280.0 -
 Capital expenditures (136.2) (145.3)
 Other - net 8.3 (38.5)
 Cash provided by (used for) investment
 activities 152.1 (183.8)
 Cash surplus before financing activities 184.6 36.2
 Financing activities
 Dividends paid (36.0) (84.7)
 Dividend paid to minority interest (5.2) (15.6)
 Net decrease in borrowings (85.5) 39.1
 Common shares issued 16.3 80.3
 Other - net (1.3) (1.4)
 Cash provided by (used for) financing
 activities (111.7) 17.7
 Increase in cash and marketable securities $ 72.9 $ 53.9
 NOTE: All dollar amounts are expressed in United States currency.
 -0- 10/29/93
 /CONTACT: Bob Purcell of Inco Limited, 416-361-7758/
 (N)


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

TM -- NY101 -- 6521 10/25/93 16:39 EDT
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Publication:PR Newswire
Date:Oct 25, 1993
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