Cominco’s quarterly profit down sharply from last year

A consolidated profit of $7.3 million was reported by Cominco (TSE) for its 1991 second quarter ended June 30, compared with earnings of $23.2 million in the second quarter of 1990.

The Mining and Integrated Metals business segment accounted for an operating profit of $13.4 million during the recent quarter, compared with $26.3 million in the same quarter last year.

This year’s second-quarter earnings represent a substantial improvement over the 1991 first quarter when Cominco reported a loss of $10.2 million. The company attributed its improved performance to higher production and sales volumes of refined zinc, copper concentrate and fertilizers. But the quarterly earnings also included a net gain of $3.4 million from the sale of equity interests in two foreign smelting companies.

Cominco also reported a consolidated loss of $2.9 million on sales of $661.5 million for the first six months of this year, compared to a profit of $40.3 million on sales of $683.9 million in the comparable

period last year.

But the company pointed out that the current artificial exchange value of the Canadian dollar against the American dollar adversely affected its earnings from exports. To demonstrate the point, the company said 1991 first-half earnings would have been $4 million higher relative to the same period last year “had rates remained constant.”

Cominco said its operations “ran well,” with overall production of refined metal and concentrates exceeding last year’s levels.

Production levels improved in the second quarter over the 1991 first quarter at the Red Dog mine in Alaska, but the company said the base metal mine has not yet reached full operating capacity on a continuous basis. The zinc smelter at Trail, B.C., is reported to be working well. But Cominco has not yet determined whether it will continue to use the QSL process technology at its new lead smelter at Trail, or change to another method such as the Kivcet technology from the Soviet Union.