SPCC REPORTS FIRST QUARTER RESULTS
NEW YORK, N.Y. April 22, 1996 -- Southern Peru Copper Corporation (NYSE
and LSE:PCU) today reported net earnings of $49.1 million, or $0.61 per share, for the
first quarter of 1996 compared with net earnings of $44.4 million or $0.67 per share, for
the first quarter of 1995.
Sales of products were $196.4 million in the first quarter of 1996 compared with
$204.7 million in the first quarter of 1995.
Copper mine production in the first quarter of 1996 increased nearly 26% over
the first quarter of 1995 to 161.6 million pounds. The increase in production is
principally attributable to higher ore grades at the Cuajone mine and 22.6 million pounds
of refined copper from the new solvent extraction, electrowinning plant (SX/EW) at the
Company's Toquepala mine which commenced operations in the fourth quarter of 1995.
Copper prices were lower in the first quarter of 1996 compared with the year
earlier period. The average price for copper on the London Metal Exchange (LME) was
$1.17 per pound for the first quarter of 1996 compared with $1.33 per pound in the first
quarter of 1995. The price for molybdenum, a by-product of the Company's copper
production, was lower in the first quarter of 1996 at $4.07 per pound compared with
$13.77 per pound in the first quarter of 1995. The price for silver was $5.54 per ounce in
the first quarter of 1996 compared with $4.70 in the first quarter of 1995.
First quarter 1996 reported sales were reduced by pricing adjustments on
provisionally priced fourth quarter 1995 sales. Most of the Company's sales are recorded
on a provisional price basis when copper is shipped to customers. Final pricing generally
occurs within the two months following shipment.
Commenting on the Company's results, Charles G. Preble, President and Chief
Executive Officer of SPCC said, "Lower copper and molybdenum prices decreased net
earnings by an estimated $29 million. The Company's increased production as well as
lower unit operating costs offset most of the effect of the lower metal prices."
Net earnings for the first quarter 1996 were increased due to a reduction in the
minority interest of labor shares in the Company's Peruvian branch. An exchange of
common shares for labor shares was completed in the fourth quarter of 1995 and reduced
the interest of labor shares from 17.3% to 3.3%. The exchange offer increased the
number of common shares outstanding to 80.2 million from 65.7 million in 1995.
SPCC is the largest mining company in Peru and operates two mines, a smelter
and a refinery in the southern region of Peru, employing approximately 5,000 people.
Shareholders in SPCC are ASARCO Incorporated (NYSE:AR) (54.1%); a subsidiary of
the Marmon Corporation (15.0%); Phelps Dodge Overseas Capital Corporation (13.9%)
and common shareholders (17.0%).
Southern Peru Copper Corporation and Subsidiaries
First Quarter Results
(in millions, except for per share data)
|
Three Months Ended March 31, |
|
|
Historical |
Pro Forma |
|
1996 |
1995 |
1995 |
|
|
|
|
Net sales |
$196.4 |
$204.7 |
$204.7 |
|
|
|
|
Earnings before taxes on income and minority interest of labor shares |
|
77.4 |
81.2 |
81.2 |
|
|
|
|
Taxes on income |
26.3 |
26.8 |
26.8 |
|
|
|
|
Earnings before minority interest of labor shares |
|
51.1 |
54.4 |
54.4 |
|
|
|
|
Minority interest of labor shares in income of Peruvian Branch |
|
2.0 |
10.0 |
1.9 |
|
|
|
|
Net earnings |
$49.1 |
$44.4 |
$52.5 |
|
|
|
|
Weighted average number of shares outstanding |
|
80.2 |
65.7 |
80.2 |
|
|
|
|
Net earnings per share |
$0.61 |
$0.67 |
$0.65 |
|
|
|
|
Cash dividends paid per share |
$0.65 |
$0.41 |
$0.33 |
|
|
|
|
Note: Pro Forma 1995 assumes that the exchange offer for labor shares was completed January 1, 1995 and is presented for comparison purposes.
Average Metal Prices
|
Three Months Ended
March 31,
|
|
1996 |
1995 |
|
|
|
|
|
|
Copper (per pound - LME) |
$1.17 |
$ 1.33 |
|
|
|
Silver (per ounce - COMEX) |
$5.54 |
$ 4.70 |
|
|
|
Molybdenum (per pound - |
|
|
Metals Week Dealer Oxide) |
$4.07 |
$13.77 |
Metal Production and Sales
|
Three Months Ended
March 31,
|
|
1996 |
1995 |
Copper (000s pounds) |
|
|
Mined |
161,600 |
128,400 |
Refined |
127,400 |
106,000 |
Sales |
169,000 |
127,200 |
|
|
|
|
|
|
Silver (000s ounces) |
|
|
Mined |
651 |
619 |
Refined |
557 |
535 |
Sales |
819 |
667 |
|
|
|
|
|
|
Molybdenum (000s pounds) |
|
|
Mined |
1,769 |
1,617 |
Sales |
1,867 |
1,892 |
Southern Peru Copper Corporation and Subsidiaries
Consolidated Statement of Earnings
(unaudited)
|
(in thousands except per share amounts) |
Net sales |
$ 196,408 |
$ 204,738 |
|
|
|
Operating costs and expenses: |
|
|
Cost of sales |
94,679 |
94,672 |
Administrative and other expenses |
13,005 |
14,420 |
Depreciation, amortization and depletion |
10,327 |
10,723 |
Provision for workers' participation |
5,638 |
7,390 |
Exploration expense |
655 |
323 |
Total operating costs and expenses |
124,304 |
127,528 |
|
|
|
Operating income |
72,104 |
77,210 |
|
|
|
Interest income |
6,169 |
2,543 |
Interest expense |
(3,132) |
(1,524) |
Other income |
2,273 |
3,006 |
|
|
|
Earnings before taxes on income and minority interest of |
|
|
labor shares |
77,414 |
81,235 |
|
|
|
Taxes on income |
26,288 |
26,834 |
Minority interest of labor shares |
2,018 |
10,046 |
|
|
|
Net earnings |
$ 49,108 _______ |
$ 44,355 _______ |
|
|
|
|
|
|
Per common share amounts: |
|
|
Net earnings |
$ 0.61 |
$ 0.67 |
Dividends paid |
$ 0.65 |
$ 0.41 |
|
|
|
Weighted average number of shares outstanding |
80,206 |
65,717 |
Southern Peru Copper Corporation and Subsidiaries
Consolidated Balance Sheet (unaudited)
|
March 31, |
December 31, |
|
1996 |
1995 |
ASSETS |
|
|
Current assets: |
|
|
Cash and cash equivalents |
$242,740 |
$219,646 |
Marketable securities |
- |
42,453 |
Accounts receivable: |
|
|
Trade: |
|
|
Stockholders and affiliates |
6,664 |
8,732 |
Other trade |
63,850 |
80,100 |
Other |
9,377 |
11,631 |
Inventories |
97,095 |
103,635 |
Other current assets |
12,428 |
16,648 |
|
|
|
Total current assets |
432,154 |
482,845 |
|
|
|
Net property |
783,209 |
779,368 |
Other assets |
19,886 |
9,488 |
|
|
|
Total Assets |
$1,235,249 _________ |
$1,271,701 _________ |
|
|
|
LIABILITIES |
|
|
Current liabilities |
|
|
Current portion of long-term debt |
$26,856 |
$17,034 |
Accounts payable - trade |
16,458 |
32,889 |
Accounts payable - other |
6,842 |
8,056 |
Accrued liabilities |
50,435 |
112,390 |
|
|
|
Total current liabilities |
100,591 |
170,369 |
|
|
|
Long-term debt |
113,086 |
76,828 |
Accrued severance pay |
6,343 |
6,354 |
Deferred income taxes |
39,677 |
39,677 |
|
|
|
Total non-current liabilities |
159,106 |
122,859 |
|
|
|
Minority interest of labor shares |
26,256 |
24,986 |
|
|
|
STOCKHOLDERS' EQUITY: |
|
|
Common stock, par value $0.01; 31,249,167 shares authorized, 13,679,667 shares issued and 13,630,248 shares outstanding |
|
137 |
115 |
Class A common stock, par value $0,01; 68,750,833 shares issued and authorized, 66,550,833 shares outstanding |
|
666 |
688 |
Additional paid-in capital |
265,738 |
265,738 |
Retained earnings |
683,585 |
686,946 |
Treasury stock at cost, 49,419 common shares |
(830) |
- |
|
|
|
Total stockholders' equity |
949,296 |
953,487 |
|
|
|
Total Liabilities, Minority Interest
and Stockholders' Equity |
$1,235,249 _________
|
$1,271,701 _________
|
Southern Peru Copper Corporation and Subsidiaries
Consolidated Statement of Cash Flows (unaudited)
OPERATING ACTIVITIES: |
|
|
Net earnings |
$49,108 |
$44,355 |
Adjustments to reconcile net earnings to net
cash provided from operating activities: |
|
|
Depreciation, amortization and depletion |
10,327 |
10,723 |
Deferred income taxes |
1,032 |
617 |
Minority interest of labor shares, net of distributions |
139 |
10,046 |
Loss on dispositions and sales of assets |
407 |
- |
Cash provided from (used for) operating assets and liabilities: |
|
|
Accounts receivable |
20,505 |
34,681 |
Inventories |
6,540 |
11,209 |
Accounts payable |
(16,943) |
(36,883) |
Accrued taxes on income |
(36,016) |
4,677 |
Other operating liabilities and reserves |
(25,292) |
(5,820) |
Other operating assets |
2,846 |
657 |
Foreign currency translation gain |
(1,293) |
(2,213) |
Net cash provided from operating activities |
11,360 |
49,631 |
|
|
|
INVESTING ACTIVITIES: |
|
|
Capital expenditures |
(14,575) |
(43,400) |
Purchases of held to maturity investments |
- |
(33,880) |
Proceeds from maturity of investments |
42,453 |
40,523 |
Net cash provided from (used for) investing activities |
27,878 |
(36,757) |
|
|
|
FINANCING ACTIVITIES: |
|
|
Dividends paid |
(52,150) |
(26,812) |
Proceeds from borrowings |
47,000 |
| |