Metal prices boost Asarco earnings

Higher metal prices and reduced operating costs contributed to improved year-end results for Asarco (NYSE).

Asarco earned US$64 million (or US$1.53 a share), compared with US$15.6 million (or US38 cents a share) for year-end 1993.

The results were attained despite a disappointing fourth quarter in which the company earned US$48.2 million (or US$1.15 per share), compared with US$73.7 million (or US$1.78 per share) in the same period in 1993. Results for the 1993 fourth quarter included recognition of US$18.2 million (related to previously unrecognized earnings derived from investments in Peru) and US$86.3 million (which resulted from a change in accounting principles). This past year’s earnings were boosted by improved operations at the Ray copper mine in Hayden, Ariz., and from the copper refinery in Amarillo, Tex. Higher prices for copper, lead, zinc and molybdenum contributed to the bottom line.

Between the recent and the previous fourth quarters, copper rose to US$1.29 from US75.7 cents per lb., lead increased to US$29.4 cents from US18.8 cents per lb., zinc swelled to US50.2 cents from US42.6 cents per lb., and moly rocketed to US$8.57 from US$2.60 per lb.

As a result of the price improvements, Asarco decided to restart the moly circuit at the Mission mine in Arizona. Operations are expected to resume this month; at full production, the circuit should produce 130,000 lb. per month.

During the fourth quarter of 1994, attempts were made to increase the liquidity and transparency of several investments in foreign mining companies. In November, Asarco and three other shareholders decided to sell a 20% interest in Southern Peru Copper to the public through an initial public offering. Asarco plans to retain a 52.3% stake in the Peruvian company, which contributed US$15.5 million (after tax) to fourth-quarter earnings. Also, during the year, Australian-based MIM Holdings sold a 24.7% interest in Asarco, whereas Asarco continued to hold a 15.4% interest in MIM.