Rio Algom reports earnings decline

Potash problems combined with lower uranium prices were responsible for a drop in Rio Algom’s net earnings for the first six months of 1987.

Rio Algom reported unaudited consolidated net earnings of $38.2 million or 86 cents per common share for the 6-month period ended June 30. That compares with $48.2 million or $1.10 per share for the same period last year.

In the second quarter of 1987, consolidated net earnings were $22.0 million or 50 cents per share compared to $24 million or 55 cents per share in 1986. Second quarter revenues were $395.1 million, up from $333.7 million in 1986.

According to Chairman George Albino, the earnings drop was caused mainly by the losses incurred by Potash Co. of America in which Rio holds an 87.8% interest.

He said expenses associated with the closing of the Saskatoon, Sask., potash mine in February due to flooding was a major factor in the earnings decline.

Rio Algom shares were trading recently on the Toronto Stock Exchange at $24, just below its 52-week high of $25.50 but well above its $19 low point.