Minerals division is top earner at Noranda

The Minerals division of resource conglomerate Noranda (TSE) captured first place in the company’s four earnings divisions during the second quarter, followed by its manufacturing, forest and energy sectors, respectively. Operating earnings by Noranda Minerals for the second quarter surged ahead nearly 61% to $79 million compared with $49 million in the year-earlier period.

Six-month earnings from minerals totalled $136 million, compared with $112 a year ago. Those earnings were bolstered by a strong contribution from Noranda’s 50% owned nickel mining unit Falconbridge Ltd., and production improvements at the company’s Quebec and New Brunswick base metal operations.

Meanwhile, battered by high interest rates and a strong Canadian dollar, Noranda saw its second- quarter net earnings tumble 55% to $56 million (24 cents per share) on revenue of 2.56 billion, down from $125 million (63 cents per share) on revenue of 2.40 billion in the comparable quarter last year.

“These results reflect dramatically reduced earnings from the company’s forest operations as well as the negative combination of a strong Canadian dollar and high interest rates,” reported Noranda.

Noranda’s 6-month net earnings fell 59% to $115 million (50 cents per share) from $283 million ($1.45 per share) in the first half of 1989. Revenue was $5.01 billion compared with $4.68 billion a year ago.

Noranda Manufacturing’s quarterly earnings fell to $27 million from $42 million, while the division’s 6-month income was also substantially below that of the previous year. The drop was due to low aluminum prices, which remained below 1989 levels, the company said.

Results from Noranda Forest continued to decline, with operating earnings of $17 million for the quarter compared with $59 million in the year-earlier period. Six- month income plunged to $40 million from $117 in the first half of last year. The company blamed weak pulp prices and startup expenses on several of its new projects for the decline.

Noranda Energy reported a second-quarter operating loss of $4 million compared to net earnings of $13 million in the same quarter of 1989. The loss reflects lower oil prices during the quarter and heavy exploration expenses by Canadian Hunter’s U.S. operation.

Investors seemed to take the recent spate of poor results in stride. At presstime the shares of Noranda had slipped only 12 cents to $19.88 within a 12-month trading range of $18-28.38.

The company said its earnings for the remainder of the year are expected to continue in line with those reported for the first six months.006 0600,0206,0300,0008 Noranda (TSE) $000s except per-share items 3 months ended June 30 1990 1989 Revenue $2,563,000$2,404,000 Net earnings 56,000 125,000

per share 0.23 0.59004