Cominco still adding up profits

Higher metal prices for zinc and copper generated increased earnings for the quarter ended March 31 of $70.5 million, as compared with a consolidated profit of $31.9 million for the same period last year.

While earnings were lower than those in the fourth quarter of 1988 due to a reduction in copper earnings, this was attributed to the cold weather that hurt production levels in British Columbia earlier in the year.

The cold weather in western Canada also affected Cominco’s fertilizer division which reported a profit of $9.8 million in the quarter, some $2 million less than the same period last year.

After providing for dividends on preferred shares, the first quarter earnings were 86 cents per common share on sales of $394.5 million compared with earnings of 35 cents per share on sales of $363.2 million in the same period last year.

Working capital at the end of the quarter amounted to $419 million compared with $421 million at year- end, while total long-term debt was reduced to $285.5 million compared with $343.2 million at year-end.

Cominco ended its program to reduce debt by disposal of non- core assets in 1988, so its latest debt reductions occurred despite heavy capital expenditures on a number of new projects.

In the latest annual report, which contained highlights of record earnings in 1988, President Robert Hallbauer called the company’s financial condition “excellent”. He noted that Cominco is now “able to take maximum advantage of higher metal prices or survive should tough times return”.

With its increase in earnings, Cominco has stepped up the pace in exploration and in property acquisition. Although it traditionally has emphasized base metals, last year’s exploration costs were divided equally between gold and base metals.

This year Cominco and/or its subsidiaries expect to have several new mines on stream. The first, Aberfoyles’s new Hellyer zinc and lead mine in Australia, began production in March and was officially opened on April 10. Construction was completed on schedule and below budget.

The huge Red Dog base metals project in Alaska and the Marte gold mine in Chile (owned 25.7% by subsidiary Cominco Resources) are still in the construction phase.

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