Date: Thu, 20 Nov 1997 22:40:38 GMT Server: Apache/1.2.4 Last-Modified: Tue, 17 Jun 1997 15:04:48 GMT ETag: "dd462-9321-33a6a790" Content-Length: 37665 Accept-Ranges: bytes Connection: close Content-Type: text/html ASARCO Southern Peru News
Southern Peru News


SPCC REPORTS SECOND QUARTER RESULTS

NEW YORK, N.Y., July 29, 1996 - Southern Peru Copper Corporation (NYSE and LSE:PCU) today reported net earnings of $45.2 million, or $0.56 per common share, for the second quarter of 1996 compared with net earnings of $42.9 million or $0.65 per share, for the second quarter of 1995. Sales of products were $173.2 million in the second quarter of 1996 compared with $212.2 million in the second quarter of 1995.

For the first six months of 1996 net earnings were $94.3 million, or $1.18 per share, compared with net earnings of $87.2 million or $1.33 per share in the same period in 1995. Sales of products were $369.6 million in the first six months of 1996 compared with $416.9 million in the same period in 1995.

Net earnings for the second quarter of 1996 and for the six month period reflect 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 which 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.

Copper mine production in the second quarter of 1996 increased 34% over the second quarter of 1995 to 173.1 million pounds. The increase in production is principally attributable to higher ore grades at both the Cuajone and Toquepala mines and 22.8 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 second quarter of 1996 compared with the year earlier period. The average price for copper on the London Metal Exchange (LME) was $1.12 per pound for the second quarter of 1996 compared with $1.31 per pound in the second quarter of 1995. The price for molybdenum, a by-product of the Company's copper production, was lower in the second quarter of 1996 at $3.15 per pound compared with $7.21 per pound in the second quarter of 1995. The price for COMEX silver was $5.29 per ounce in the second quarter of 1996 compared with $5.47 in the second quarter of 1995.

Cost of sales were $82.2 million in the second quarter of 1996 compared with $107.3 million in the second quarter of 1995. The decline in cost of sales is principally attributable to the reduction of sales of copper produced from purchased concentrates in the second quarter of 1996.

The Company has had in place a price protection program consisting of put options. The Company sold a portion of its price protection for a pretax gain of $12.3 million, representing an assured gain of 12.8 cents per pound over the future prevailing price when the underlying production is sold. SPCC will recognize $7.9 million of the gain when the product is sold during the second half of 1996 and $4.4 million in 1997. SPCC continues to hold puts on 87.8 million pounds of copper for the second half of 1996 and 46.5 million pounds for the first quarter of 1997, both at an average strike price of 95 cents.

Commenting on the Company's results, Charles G. Preble, President and Chief Executive Officer of SPCC said, 'Second quarter results were encouraging, particularly in view of the recent decline in the price of copper. Production and sales volumes were significantly improved over 1995 and production costs have been reduced principally reflecting the new SX/EW production.'

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%).


Average Metals Prices

Three Months Ended

June 30,

Six Months Ended

June 30,

1996 1995 1996 1995
Copper (per pound - LME) $1.12 $1.31 $1.14 $1.32
Silver (per ounce - COMEX) $5.29 $5.47 $5.42 $5.08
Molybdenum (per pound -
Metals Week Dealer Oxide)


$3.15


$7.21


$3.56


$10.49


Metal Production and Sales

Three Months Ended
June 30,
Six Months Ended
June 30,
1996 1995 1996 1995
Copper (000s pounds)
Mined 173,100 128,800 334,700 257,200
Refined 121,600 108,600 249,000 214,600
Sales 161,800 151,700 330,800 278,900
Silver (000s ounces)
Mined 783 791 1,434 1,410
Refined 549 590 1,106 1,125
Sales 726 931 1,545 1,598
Molybdenum (000s pounds)
Mined 2,058 2,298 3,827 3,915
Sales 1,937 1,526 3,804 3,418


Southern Peru Copper Corporation and Subsidiaries

Second Quarter and Year to Date Results
(in millions, except for per share data)

Three Months Ended June 30, Six Months Ended June 30,
Historical Pro Forma Historical Pro Forma
1996 1995 1995 1996 1995 1995
Net sales
$173.2
$212.2
$212.2
$369.6
$416.9
$416.9
Earnings before taxes on
income andminority interest of labor shares
68.4
77.2
76.2
145.8
158.4
157.4
Taxes on income
21.8
25.5
25.2
48.1
52.3
52.0
Earnings before minority
interest of labor shares
46.6
51.7
51.0
97.7
106.1
105.4
Minority interest of labor
shares in income of Peruvian Branch
1.4
8.8
1.7
3.4
18.9
3.6
Net earnings
$45.2
$42.9
$49.3
$94.3
$87.2
$101.8
Weighted average number
of shares outstanding
80.2
65.7
80.2
80.2
65.7
80.2
Net earnings per share
$0.56
$0.65
$0.62
$1.18
$1.33
$1.27
Cash dividends paid per share
$0.30
$0.11
$0.09
$0.95
$0.52
$0.43

Note: Pro Forma 1995 assumes that the exchange offer for labor shares was completed January 1, 1995 and is presented for comparison purposes.


SOUTHERN PERU COPPER CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF EARNINGS (unaudited)

Three Months Ended
June 30,
Six Months Ended
June 30,
1996 1995 1996 1996
(in thousands, except per share amounts)
Net sales $173,169 $212,177 $369,577 $416,915
Operating costs and expenses:
Cost of sales 82,176 107,283 176,855 201,955
Administrative and other expenses 11,249 11,673 24,254 26,093
Depreciation, amortization and depletion 10,343 10,750 20,670 21,473
Provision for workers' participation 4,807 6,528 10,445 13,918
Exploration expense 492 591 1,147 914
Total operating costs and expenses ______
109,067
______
136,825
______
233,371
______
264,353
Operating income 64,102 75,352 136,206 152,562
Interest income 4,901 3,467 11,070 6,010
Other income 2,582 2,626 4,855 (5,788)
Interest expense (3,205) (4,264) (6,337) (5,788)
Earnings before taxes on income
and minority interest of labor shares
68,380 77,181 145,794 158,416
Taxes on income 21,805 25,475 48,093 52,309
Earnings before minority interest of labor 46,575 51,706 97,701 106,107
Minority interest of labor shares 1,346 8,837 3,364 18,883
Net earnings $ 45,229
_______
$ 42,869
_______
$ 94,337
_______
$ 87,224
_______
Per common share amounts:
Net earnings $ 0.56
_____
$ 0.65
_____
$ 1.18
_____
$ 1.33
_____
Cash dividends paid $ 0.30 $ 0.11 $ 0.95 $
Weighted average number of shares 80,183 65,717 80,204 65
outstanding


SOUTHERN PERU COPPER CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET (unaudited)

June
30,
December 31,
1996 1995
ASSETS (in thousands)
Current assets:
Cash and cash equivalents $ 237,737 $ 219,646
Marketable securities - 42,453
Accounts receivable:
Trade:
Stockholders and affiliates 2,405 8,732
Other trade 44,493 80,100
Other 15,736 11,631
Inventories 108,465 103,635
Other current assets 6,136 16,648
Total current assets 424,972 482,845
Net property 811,345 779,368
Other assets 19,440 9,488
Total $1,255,757
_________
$1,271,701
_________
LIABILITIES
Current liabilities:
Current portion of long-term debt $ 26,935 $ 17,034
Accounts payable - trade 19,654 32,889
Accounts payable - other 6,802 8,056
Accrued liabilities 53,452 112,390
Total current liabilities _______
106,843
_______
170,369
Long-term debt 105,397 76,828
Accrued severance pay 2,648 6,354
Deferred income taxes 45,373 39,677
Total non-current liabilities ______
153,418
______
122,859
Minority interest of labor shares in the Peruvian Branch 25,018 24,986
STOCKHOLDERS' EQUITY
Common stock, par value $0.01(a) 137 115
Class A common stock, par value $0.01(b) 666 688
Additional paid-in capital 265,745 265,738
Retained earnings 704,713 686,946
Treasury stock at cost, 47 common shares (783) -
Total Stockholders' Equity ______
970,478
______
953,487
Total $1,255,757
_________
$1,271,701
_________
Authorized Outstanding
(a) Common shares: 31,249 13,633 11,480
(b) Class A common shares: 68,751 66,551 68,751


SOUTHERN PERU COPPER CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)

Three Months Ended
June 30,
Six Months Ended
June 30,
1996 1995 1996 1996
(dollars in thousands)
OPERATING ACTIVITIES
Net earnings $45,229 $42,869 $94,337 $87,224
Depreciation, amortization and depletion 10,343 10,750 20,670 21,473
Minority interest of labor shares, net of distributions 522 8,837 661 18,883
Cash provided from (used for) operating
assets and liabilities
11,194 14,130 (37,166) 233
Other, net (72) (698) 74 (2,294)
Net cash provided from operating activities ______
67,216
______
75,888
______
78,576
______
125,519
INVESTING ACTIVITIES
Capital expenditures (37,356) (64,343) (51,931) (07,743)
Transfer of cash from restricted account - 59,533 - 5
Other, net - 21,478 42,453 2
Net cash provided from (used for)
investing activites
(37,356) 16,668 (9,478) (20,089)
FINANCING ACTIVITIES
Dividends paid (24,054) (7,500) (76,204) (34,312)
Net borrowings (repayments) (7,610) 5,442 38,469 13,896
Escrow deposits on long-term loans - - (10,152) -
Treasury stock and labor share purchase (2,682) - (3,836) -
Proceeds from labor share subscription - 10,944 - 10,944
Net cash provided from (used for)
financing activities (34,346) 8,886 (51,723) (9,472)
Effect of exchange rate changes on cash (517) (795) 716 (408)
Increase (decrease) in cash and cash equivalents $ (5,003) $100,647 $ 18,091 $ 95,550



FOR FURTHER INFORMATION:
Jerry W. Cooper (212) 510-1810
Donald M. Noyes (212) 510-1813


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