Cyprus bleeds red in 1998

Englewood, Colo.-based Cyprus Amax Minerals (CYM-N) posted a net loss for 1998 as a result of low copper prices.

The loss of US$75 million (or $1.02 per share) compares with earnings of US$69 million (or 54 cents per share) in 1997. Revenues fell to US$2.6 billion from US$3.3 billion between the two periods.

Cyprus realized a copper price of US83 cents per lb. sold in 1998, which was US21 cents lower than in 1997. A price protection program netted the company 2 cents per lb. in 1998, though no such program is in place for 1999 or beyond.

Lower cash costs offset lower revenues in the past year, with cash production costs amounting to US56 cents per lb., compared with US50 cents in 1997.

The company cranked out 967 million lbs. of the red metal in 1998, compared with 1 billion lbs. in the previous year.

Coal production, at 72 million tons, remained unchanged from 1997, whereas sales were slightly higher.

Overall revenues were adversely affected by the liquidation of Cyprus’s gold and lithium divisions. The latter was sold to a German company for US$305 million, whereas the former was merged with Amax Gold and Kinross Gold (K-T).

In the fourth quarter, Cyprus incurred a loss of US$63 million (74 cents per share), compared with a loss of US$97 million ($1.09 per share) in the last three months of 1997. Revenue between the two periods slipped to US$622 million from US$757 million.

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