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PECHINEY REPORTS CONSOLIDATED RESULTS FOR THE FIRST HALF OF 1992; EARNINGS ARE GOOD FOR PACKAGING, POOR FOR ALUMINUM

 PECHINEY REPORTS CONSOLIDATED RESULTS FOR THE FIRST HALF OF 1992;
 EARNINGS ARE GOOD FOR PACKAGING, POOR FOR ALUMINUM
 GREENWICH, Conn., Sept. 21 /PRNewswire/ -- The following statement was issued by the Pechiney Group in Paris today:
 Since the start of 1992, the Pechiney Group has decided on measures to modify the group's legal and financial structure, reduce debt, refocus activities, and bring about a restructuring of manufacturing activities in those sectors most affected by the economic crisis.
 These measures involved notably:
 -- The transfer from Pechiney International to Pechiney of certain aluminum production and international trade assets.
 -- The increase in Pechiney International's capital through the exercise of warrants, accompanied by a reduction from 75 percent to 67.6 percent in the share held by Pechiney in Pechiney International.
 -- The sale by Pechiney to Cogema and Framatome of nuclear fuel activities and of 50 percent of zirconium and titanium activities.
 -- Restructuring programs primarily affecting the turbine components activity (Howmet) and certain Le Carbone-Lorraine and ferroalloy businesses.
 These measures -- which will have a permanent positive effect, with some starting as early as the second half of 1992 -- have a series of non-recurring consequences, positive and negative, that have been recorded in the consolidated results for the first half of 1992. Also integrated into these results have been reserves for risks or depreciation where such reserves proved appropriate.
 The principal figures, in millions of French francs, follow. They are compared to the results for the same period in 1991, restated to reflect the scope of consolidation as it applied on June 30, 1992.
 PECHINEY GROUP
 First Half 1992 First Half 1991
 Restated Published
 Total sales 34,065 36,368 38,299
 Earnings from operations
 before financial expense 1,797 2,449 2,613
 Packaging 1,170 1,128 1,138
 Aluminum 272 732 753
 Engineered products 250 462 451
 Related industrial activities (22) 66 217
 International trade 199 124 117
 Holding company (72) (63) (63)
 Net financial expense 1,178 1,409 1,434
 Earnings from operations
 after financial expense 619 1,040 1,179
 Other income and expense 602 (5) (15)
 Income before goodwill
 amortization 871 531 582
 Net income after goodwill
 amortization 782 429 480
 The results for the first half of 1992 were impacted only very slightly by the lasting effect of the strategic measures since all transactions were implemented during the months of May and June. On the other hand, the non-recurring effects of the measures have a significant overall positive impact of the same order of magnitude as net income. These effects are complex and accounted for in several lines of the income statement.
 Regarding operating results, the effect of a decline of approximately FF 650 million in operating profit (earnings from operations before financial results) was lessened by an FF 230 million decrease in financial expense.
 A sector-by-sector analysis of operating profit indicates the following developments:
 -- The packaging sector continued to advance despite the fact that most of its earnings are attained during the second half of the year because of the seasonal nature of its business. Sales volume increased by 4.2 percent; operating profit rose 4 percent stated in French francs and 7 percent in U.S. dollars.
 -- The aluminum sector's operating profit, on the other hand, was very weak, due primarily to very low metal prices and technical difficulties encountered while starting up new capacity at the Rhenalu mill products operations.
 -- The engineered products sector's operating profit was severely impacted by very difficult conditions in the aerospace industry and in capital goods markets, and led to decisions to restructure activities at Howmet as well as at Le Carbone-Lorraine.
 -- The related industrial activities sector, which no longer includes the nuclear fuel and zirconium and titanium businesses, was severely affected by the economic crisis. The sector's remaining ferroalloy and heavy carbon products businesses will undergo further restructuring.
 -- The international trade department reported a gain in operating profit over the preceding period, but was unable to reach the levels attained previously under more favorable economic conditions.
 The same economic trends are expected to persist throughout the second half of 1992. The packaging sector will continue to expand its activities as well as earnings; its operating profit for the full year should reach, or even exceed, US$500 million, compared to $534 million in 1991. Aluminum mill products (Rhenalu) should improve its earnings after returning to normal market conditions. The outlook for aluminum metal and ferroalloys, on the other hand, will be as difficult as for the first half of the year; earnings from these activities will depend on the exchange value of the U.S. dollar, which has been particularly weak for several months. As far as financial expenses are concerned, they will be noticeably lower thanks to the full impact in the second half of 1992 of a reduction in debt.
 At this time, the group forecasts consolidated earnings for the full year 1992 to exceed the FF 782 million reported for the first half of the year. This forecast is based on the assumption that continuing difficulties in aluminum metal and ferroalloys will not necessitate further restructuring measures, which would result in additional reserves that would decrease further the profits forecast for the year 1992.
 -0- 9/21/92
 /CONTACT: Ilse Minkenberg of Pechiney, 203-625-8836/ CO: Pechiney Corporation ST: Connecticut IN: SU: ERN


CK-LR -- NY046 -- 1690 09/21/92 12:48 EDT
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Date:Sep 21, 1992
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