Despite low metal prices and a disappointing fourth quarter,
The major earned $658 million (or $2.68 per share) on revenue of $6.03 billion in the 12 months ended Dec. 31, compared with $261 million (or $1 per share) on $6.4 billion in 1997. Excluding proceeds from the sale of Norcen Energy Resources, 1998 earnings topped $75 million.
Cash flow between the periods rose to $2.4 billion from $664 million, including proceeds from the downloading of assets in 1998. However, cash generated from operations fell to $296 million from $546 million.
In the recent fourth quarter, Noranda lost $2 million on revenue of $1.42 billion, compared with earnings of $64 million on $1.52 billion in the corresponding period of 1997.
The 1998 fourth quarter also saw the company spin off its non-mining assets to shareholders, which translated into $5.14 per share (T.N.M., Jan. 11/99). To reflect this change, quarterly dividends have been reset at 20 cents per share, with the next one due in mid-March.
Noranda produced the following volumes during the 3-month period ended Dec. 31, 1998: 111,000 tonnes zinc; 47,000 tonnes copper; 17,000 tonnes nickel; 18,000 tonnes lead; and 3.55 million oz. silver.
In terms of refined metal, the major produced 101,000 tonnes zinc; 123,000 tonnes copper; 20,000 tonnes nickel; 29,000 tonnes lead; 55,000 tonnes aluminum (plus 67,000 tonnes of fabricated aluminum); 274,000 oz. gold; and 11.2 million oz. silver.
Noranda invested $1.5 billion on capital expenditures last year, which is $100 million more than in the previous year. The investment resulted in a net debt equal to 25.3% of the company’s total capitalization, which is 1.7% lower than at the end of 1997 and at the lower end of its stated target range of 25-35%.
Among the projects Noranda is developing are: the Bell Allard copper-zinc deposit in Quebec, where mining at a rate of 2,000 tonnes per day is scheduled to begin in mid-year; the 37.5%-owned Antamina copper project in Chile, where site preparation has begun; and the 80%-owned Magnola magnesium plant in Quebec, where production is expected to start in 2000.
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