On a tide of higher production levels, second-quarter earnings have pushed
The company showed a profit of $30.9 million ($28 million, or 16 cents per share, after dividends) on revenue of $529 million in the 3-month period. For the six months ended June 30, the major earned $22.6 million on revenue of $967 million. The comparable periods in 1998 resulted in a second-quarter loss of $1.2 million on revenue of $444 million and a first-half profit of $908,000 on revenue of $887 million.
Total operating costs were up during the recent quarter, reflecting depreciation and amortization costs applied to the new projects, and interest charges were greater. Unit production costs declined, as the operating costs were spread over greater production.
The bigger top line came from new production at the Collahuasi copper mine in Chile and from higher smelter production at both Kidd Creek and the Integrated Nickel Operations (Sudbury, Raglan and Kristiansand). Kidd Creek’s copper production costs were fractionally higher at US53 cents per lb., while Integrated Nickel saw its nickel production costs fall to US$1.73 per lb. Costs at laterite-nickel producer Falconbridge Dominicana also decreased, in spite of higher oil prices.
Falconbridge actually realized lower prices for most metals compared with 1998 prices, but favourable exchange rates between the U.S. and Canadian dollars improved the revenue picture.
Negotiations between Falconbridge and the Canadian Auto Workers union at the Kidd Creek metallurgical plant are still suspended. The CAW went on strike in early July, forcing the plant to shut down. Falconbridge has declared force majeure on its present delivery contracts for copper and zinc. The Kidd Creek mine, which is not affected by the strike, is currently stockpiling ore.
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