SPCC REPORTS FOURTH QUARTER AND FULL-YEAR RESULTS
NEW YORK, N.Y. January 31, 1996 -- Southern Peru Copper Corporation
(NYSE:PCU) today reported net earnings of $68.4 million, or $1.04 per share, for the
fourth quarter of 1995 compared to net earnings of $30.7 million or 47 cents per share,
for the fourth quarter of 1994.
Sales of products were $241.3 million in the fourth quarter of 1995 compared
with $218.7 million in the fourth quarter of 1994.
For the full year 1995, SPCC reported net income of $217.8 million, or $3.31 per
share, compared with $91.2 million, or $1.39 per share, for 1994. Results for 1994
included a $12.4 million after-tax gain on the sale of investments.
Sales of products for 1995 were $928.8 million compared with $701.7 million in
1994.
Copper mine production in the fourth quarter of 1995 increased nearly 28% over
the fourth quarter of 1994 to 161.8 million pounds. The increase in production is
principally attributable to higher ore grades and the start- up of a new solvent extraction
electrowinning plant (SX-EW) at the Company's Toquepala mine in the fourth quarter of
1995. The SX-EW plant produces refined copper from copper leached from low grade
copper ore. The plant, which is designed to produce approximately 80 million pounds
annually, contributed 10 million pounds to the Company's 1995 production.
Copper prices were higher in the fourth quarter of 1995 compared with the year
earlier period. The average price for copper on the London Metal Exchange (LME) was
$1.32 per pound for the fourth quarter of 1995 compared with $1.26 per pound in the
fourth quarter of 1994. The price for molybdenum, a by-product of the Company's
copper production, was lower in the fourth quarter of 1995 at $4.34 per pound compared
with $8.57 per pound in the fourth quarter of 1994. The price for silver was $5.25 per
ounce in the fourth quarter of 1995 compared to $5.12 in the fourth quarter of 1994.
For the year 1995, copper averaged $1.33 per pound on the LME compared with
$1.05 in the prior year. The average price of molybdenum was $7.42 per pound in 1995
compared with $4.50 in the prior year. Silver averaged $5.18 per ounce in 1995
compared with $5.28 in 1994.
In November 1995, the Company offered to exchange new common shares for
labor shares issued by its Peruvian branch to workers under prior legal requirements in
Peru. These labor shares, which are traded on the Lima stock exchange, represented a
17.3% interest in the Peruvian Branch, which comprises substantially all of the
operations of SPCC in Peru. The offer ended on December 29, 1995 with 80.5% of the
labor shares tendered. SPCC now owns 96.6% of the Branch. The common shares
issued in exchange for the labor shares are listed on both the New York and the Lima
stock exchanges. The Company's balance sheet at December 31, 1995 reflects the effect
of this transaction.
Commenting on the Company's results, Charles G. Preble, President and Chief
Executive Officer of SPCC, said 'Net earnings for 1995 were the highest in the
Company's history. Strong metal prices, higher production, and lower costs all
contributed to the Company's improvement in earnings. In addition, the Company
realized the benefit of a full year's production from the Ilo Copper refinery which was
acquired in May 1994.
'Copper production from the Company's mines increased to 557.2 million
pounds in 1995, a 4% increase over the prior year. This increase is attributable to higher
throughput and copper grade at the Toquepala mine and the 10 million pounds of copper
from the new SX-EW facility.
'The Company constructed a new acid plant at its Ilo copper smelter which
became operational in October. This plant will reduce sulfur emissions by
approximately 18%. The new plant is designed to produce 175,000 tons of sulfuric acid
per year. SPCC plans to use a portion of the sulfuric acid in its SX-EW operations at its
Toquepala and Cuajone mines and expects to sell the remainder on the open market.
Additionally, the Company has instituted an intermittent control program at its smelter in
order to reduce sulfur emission levels during periods of adverse weather conditions.
'SPCC increased substantially its proven and probable ore reserves in 1995. At
December 31, 1995, proven and probable ore reserves at Toquepala are 326.7 million
tons with an average grade of 0.80% copper, and at Cuajone are 967.7 million tons with
an average grade of 0.72% copper. In addition, leachable reserves at the two mines of
677.6 millions tons have an average grade of 0.23% copper.
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 (17.7%); Phelps Dodge Overseas Capital Corporation (13.9%)
and common shareholders (14.3%).
Southern Peru Copper Corporation and Subsidiaries
Fourth Quarter and Full-Year Results
(in millions, except per share data)
|
Three Months Ended |
Year Ended |
|
|
|
|
|
Sales |
$241.3 |
$218.7 |
$928.8 |
$701.7 |
|
|
|
|
|
Earnings before taxes and minority interest |
|
110.2 |
52.7 |
380.4 |
163.9 |
|
|
|
|
|
Taxes on income |
29.9 |
16.0 |
119.1 |
54.1 |
|
|
|
|
|
Earnings before minority interest |
80.3 |
36.7 |
261.3 |
109.8 |
|
|
|
|
|
Minority interest |
11.9 |
6.0 |
43.5 |
18.6 |
|
|
|
|
|
Net earnings |
$68.4 |
$30.7 |
$217.8 |
$91.2 |
|
|
|
|
|
Weighted average number of shares outstanding |
|
65.7 |
65.7 |
65.7 |
65.7 |
|
|
|
|
|
Net earnings per share |
$1.04 |
$0.47 |
$3.31 |
$1.39 |
|
|
|
|
|
Average Metal Prices
|
Three Months Ended |
Year Ended |
|
December 31 |
December 31 |
Copper (per pound - LME) |
$1.32 |
$1.26 |
$1.33 |
$1.05 |
Silver (per ounce - COMEX) |
$5.25 |
$5.12 |
$5.18 |
$5.28 |
|
|
|
|
|
Molybdenum (per pound - |
|
|
|
|
Metals Week Dealer Oxide) |
$4.34 |
$8.57 |
$7.42 |
$4.50 |
|
|
|
|
|
Metal Production and Sales
|
1995 |
1994 |
1995 |
1994 |
|
|
|
|
|
Copper (tons) |
|
|
|
|
Mined |
80,900 |
63,400 |
278,600 |
267,800 |
Refined (a) |
59,100 |
55,200 |
221,200 |
122,500 |
Sales |
88,900 |
83,700 |
323,300 |
326,600 |
|
|
|
|
|
Silver (000s ounces) |
|
|
|
|
Mined |
791 |
716 |
2,958 |
2,979 |
Refined (a) |
705 |
585 |
2,519 |
1,210 |
Sales |
1,053 |
798 |
3,761 |
3,184 |
|
|
|
|
|
Molybdenum (000s pounds) |
|
|
|
|
Mined |
2,173 |
1,450 |
8,009 |
6,120 |
Sales |
2,327 |
1,083 |
8,401 |
5,697 |
|
|
|
|
|
(a) The Ilo refinery was purchased by the Company in May 1994. Refined data includes operations after the acquisition.
Southern Peru Copper Corporation and Subsidiaries
Consolidated Statement of Earnings
|
3 Months Ended |
12 Months Ended |
|
December 31, |
December 31, |
|
(in thousands except for per share amounts)
(unaudited) |
Net sales |
$241,350
|
$218,671 |
$928,840 |
$701,678 |
|
|
|
|
|
Operating costs and expenses: |
|
|
|
|
Cost of sales |
107,052 |
135,380 |
439,382 |
455,266 |
Administrative and other expenses |
15,123 |
14,833 |
54,637 |
50,699 |
Depreciation, amortization and depletion |
8,591 |
10,289 |
35,952 |
39,742 |
Provision for workers' participation |
9,132 |
4,491 |
32,212 |
13,944 |
Total operating costs and expenses |
139,898 |
164,993 |
562,183 |
559,651 |
|
|
|
|
|
Operating income |
101,452 |
53,678 |
366,657 |
142,027 |
|
|
|
|
|
Interest income |
6,191 |
2,434 |
14,827 |
6,521 |
Other income |
5,931 |
(444) |
12,825 |
23,204 |
Interest expense |
(3,384) |
(2,892) |
(13,904) |
(7,779) |
|
|
|
|
|
|
|
|
|
|
Earnings before taxes on income and
minority interest of labor shares |
110,190 |
52,776 |
380,405 |
163,973 |
|
|
|
|
|
|
|
|
|
|
Taxes on income: |
|
|
|
|
Currently payable |
28,253 |
16,507 |
115,925 |
56,481 |
Deferred |
1,616 |
(464) |
3,168 |
(2,342) |
|
29,869 |
16,043 |
119,093 |
54,139 |
|
|
|
|
|
Minority interest of labor shares in income of
Peruvian Branch |
11,934 |
6,030 |
43,558 |
18,610 |
|
|
|
|
|
Net earnings |
$ 68,387 _______ |
$ 30,703 _______ |
$217,754 _______ |
$ 91,224 _______ |
|
|
|
|
|
|
|
|
|
|
Per common share amounts: |
|
|
|
|
Net earnings |
$ 1.04 |
$ 0.47 |
$ 3.31 |
$ 1.39 |
Cash dividends |
$ 0.43 |
$ 0.11 |
$ 0.85 |
$ 0.33 |
|
|
|
|
|
Weighted average number of shares
outstanding |
65,717 |
65,717 |
65,717 |
65,717 |
Southern Peru Copper Corporation and Subsidiaries
Consolidated Balance Sheets
|
December 31, |
December 31, |
|
1995 |
1994 |
ASSETS: |
(dollars in thousands) |
|
|
|
Current assets: |
|
|
Cash and cash equivalents |
$ 219,646 |
$ 93,336 |
Marketable securities |
42,453 |
42,997 |
Accounts receivable: |
|
|
Trade |
88,832 |
86,717 |
Other |
11,631 |
12,062 |
Inventories: |
|
|
Metals |
35,154 |
43,692 |
Supplies |
68,481 |
71,566 |
Prepaid expenses |
15,095 |
14,676 |
Deferred income taxes, current portion |
1,553 |
- |
|
|
|
Total current assets |
482,845 |
365,046 |
|
|
|
Property, at cost: |
|
|
Buildings and equipment |
1,351,669 |
1,125,519 |
Mine development |
114,780 |
114,780 |
Mineral land |
122,832 |
12,226 |
Land, other than mineral |
936 |
867 |
Construction in progress |
39,993 |
96,957 |
|
|
|
Total property |
1,630,210 |
1,350,349 |
|
|
|
Less, accumulated depreciation, amortization and
depletion |
851,149 |
827,499 |
|
|
|
Net property |
779,061 |
522,850 |
|
|
|
Restricted cash |
- |
60,450 |
|
|
|
Other assets |
9,488 |
20,160 |
|
|
|
Total |
$ 1,271,394 _________ |
$ 968,506 ________ |
Southern Peru Copper Corporation and Subsidiaries
Consolidated Balance Sheets
|
December 31 |
December 31 |
|
1995 |
1994 |
LIABILITIES: |
(dollars in thousands) |
|
|
|
Current liabilities: |
|
|
Current portion of long-term debt |
$ 17,034 |
$ 3,855 |
Accounts payable |
40,945 |
65,874 |
Accrued liabilities |
112,390 |
52,933 |
|
|
|
Total current liabilities |
170,369 |
122,662 |
|
|
|
Long-term debt |
76,828 |
114,118 |
Accrued severance pay |
6,354 |
10,811 |
Deferred income taxes |
39,597 |
6,242 |
|
|
|
Total non-current liabilities |
122,779 |
131,171 |
|
|
|
Minority interest of labor shares in the Peruvian
Branch |
25,314 |
79,824 |
|
|
|
STOCKHOLDERS' EQUITY: |
|
|
|
|
|
Common stock, par value $0.01; authorized
100,000,000 shares, isssued at 76,251,193 shares,
outstanding 65,717,493 shares |
-
|
763
|
Common stock, par value $0.01; 31,249,167 shares |
|
|
authorized, 11,445,153 shares issued and
outstanding |
114
|
-
|
Class A Common stock, par value $0.01; |
|
|
68,750,833 shares issued, authorized and
outstanding |
688
|
-
|
Additional paid-in capital |
246,514 |
122,477 |
Retained earnings |
705,616 |
571,609 |
Treasury stock at cost, 10,533,700 shares at
Dec. 31, 1994 |
- |
(60,000) |
|
|
|
Total stockholders' equity |
952,932 |
634,849 |
|
|
|
Total |
$ 1,271,394 _________ |
$ 968,506 ________ |
Southern Peru Copper Corporation and Subsidiaries
Consolidated Statement of Cash Flows
(Condensed)
|
3 Months Ended |
12 Months Ended |
|
December 31, |
December 31, |
| (in thousands) (unaudited) |
(in thousands) |
Cash flows from operating activities: |
|
|
|
|
Net earnings |
$ 68,387 |
$ 30,703 |
$ 217,754 |
$ 91,224 |
Depreciation, amortization and depletion |
8,591 |
10,289 |
35,952 |
39,742 |
Minority interest of labor shares |
11,934 |
6,030 |
43,558 |
18,610 |
Cash provided from operating assets and liabilities |
13,465 |
33,016 |
27,608 |
1,385 |
Other, net |
5,247 |
(5,668) |
5,641 |
(20,218) |
Net cash provided by operating activities |
107,624 |
74,370 |
330,513 |
130,743 |
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
Capital expenditures |
(23,566) |
(43,406) |
(183,041) |
(116,912) |
Purchase of refinery |
- |
- |
- |
(65,000) |
Transfer of cash from restricted account |
- |
- |
60,450 |
- |
Other, net investing |
(41,908) |
9,862 |
3,140 |
43,093 |
Net cash used for investing activities |
(65,474) |
(33,544)
|
(119,451) |
(138,819) |
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
Dividends paid |
(28,000) |
(7,500) |
(83,747) |
(21,415) |
Net borrowings (repayments) |
(7,433) |
13,052 |
(24,110) |
102,373 |
Escrow deposits on long-term loans |
(741) |
11 |
10,809 |
(12,026) |
Proceeds from labor share subscription |
- |
- |
10,944 |
- |
|
- |
2,914 |
(1,555) |
(4,200) |
Net cash provided by (used for) financing
activities |
(36,174) |
8,477 |
(87,659) |
64,732 |
|
|
|
|
|
Effect of exchange rate changes on cash |
3,937 |
3,165 |
2,907 |
4,970 |
|
|
|
|
|
Net increase in cash and cash equivalents |
______ $ 9,913 |
_______ $ 52,468 |
________ $ 126,310 |
_______ $ 61,626 |
|
|
|
|
|
|