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Mining industry

Freeport-McMoRan Copper & Gold Inc. Reports Strong Second-Quarter Earnings

Strategic Insights

— 2 min read

Freeport-McMoRan Copper & Gold Inc. (FCX) reported a significant increase in net income in the second quarter of 1995, driven by higher sales volumes and improved operational efficiency. The company's PT-FI subsidiary achieved record ore throughput, reflecting the expanded milling capacity of 118,000 MTPD. Copper recovery rates also improved, with a floor price established for future sales to protect operating cash flow. The company's financial results were further boosted by the completion of the expansion project ahead of schedule and the sale of certain power generation and aviation assets.

Key Takeaways:

  • Net income applicable to common stock in the second quarter of 1995 was $40,625,000, or $0.20 per share, compared to $9,718,000, or $0.05 per share, in the same quarter of 1994.
  • For the six months ended June 30, 1995, FCX reported net income applicable to common stock of $84,618,000, or $0.41 per share, after charge for inventory adjustment.
  • PT-FI's sales of 219.3 million pounds of copper and 269,500 ounces of gold were significantly higher than in the second quarter of 1994, driven by record ore throughput.
  • Copper recovery rates improved significantly from the first quarter of 1995, as FCX continues to focus on improving recoveries and other operational areas.
  • FCX established a floor price of $0.90 cents per pound for 1996 production at a cost of approximately 1.7 cents per pound.
  • Total unit cash production costs of 30.4 cents per pound of copper were significantly lower than in the second quarter of 1994, primarily due to reduced site production and delivery costs.
  • RTZ will pay the next $100 million of exploration costs under the exploration joint venture between FCX and RTZ.
  • RTM recorded an operating loss of $7.2 million for the second quarter of 1995, compared to income of $1.0 million in 1994 and a loss of $2.6 million in this year's first quarter.

Statistics:

  • Net income applicable to common stock in the second quarter of 1995: $40,625,000
  • Earnings per share in the second quarter of 1995: $0.20
  • Net income applicable to common stock for the six months ended June 30, 1995: $84,618,000
  • Earnings per share for the six months ended June 30, 1995: $0.41
  • PT-FI's sales of copper in the second quarter of 1995: 219.3 million pounds
  • PT-FI's sales of gold in the second quarter of 1995: 269,500 ounces
  • Copper recovery rates in the second quarter of 1995: improved significantly from the first quarter of 1995
  • Floor price of copper for 1996 production: $0.90 cents per pound
  • Total unit cash production costs in the second quarter of 1995: 30.4 cents per pound of copper

Sources:

  • Business Wire, July 25, 1995 (title not specified)
  • Freeport-McMoRan Copper & Gold Inc. press release, July 25, 1995.

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