Noranda profit $1 a share foreseen by firm’s chairman

Noranda Inc. should make something better than $1 a share in the balance of this year, Chairman Alfred Powis said following the company’s annual meeting.

He told shareholders at the meeting that in the first quarter of 1987, Noranda had earnings of $29.5 million, or 14 cents a share, after preferred dividends, compared with $21.4 million or 9 cents a share, in the similar period of 1986.

But, he noted, first quarter results last year included several unusual items, without which there would have been a $4.2 million loss from operations.

He said had it not been for the Horne strike, operating earnings in the 1987 first quarter would have been about $40 million.

“With the Horne strike ended,” he said, “Noranda Minerals’ earnings will be better, and if we finally get some price improvement, they’ll be a lot better.”

He said prospects for continued strength in forest products seem good, there is reason to expect some further improvement in results from the company’s manufacturing sector, and borrowing costs will continue to benefit from the debt reduction program.

The optimistic outlook for this year, though, rests on two big assumptions, one that the Canadian dollar will not rise further, and that the company will avoid additional labor problems over the balance of 1987.

The Noranda chairman emphasized the company`s success in its urgent drive to get debt as low as possible.

To the end of last year, he said, Noranda had raised $1.25 billion for debt reduction, of which $836 million was from asset sales, $99 million net from preferred share issues and $323 million from sale of common shares and investment tax credits.

Another $358 million has been raised so far this year to keep the debt-reduction program going, he said, of which $208 million was raised in February through sale of part of the company’s interest in Hemlo Gold Mines, and $150 million from issue of subordinated convertible debentures.

And, another $350 million will be raised by selling 15% of the shares of Noranda Forest to the public, by June.

“Our objective in all of this is to produce a financial condition that’s as strong as anything that exists in the resource industries world- wide”, Mr Powis said. He said after the meeting that debt at the end of the first quarter this year stood at around $1.8 billion.

Continuing the chairman’s theme of progress in meeting pre- set targets, President David Kerr told the meeting that last year the company went a considerable way in achieving several key objectives.

“This included returning the company to profitability, strengthening the company’s equity base while reducing debt, divesting non- core assets and restructuring into four distinct divisions to enhance decision making and accountability,” Mr Kerr said.