A $20-million loss within its forestry division helped to put Toronto-based Noranda (TSE) firmly in the red during the recent third quarter.
After deductions for preferred share dividends, Noranda reported a net loss of $57 million or 39 cents a share for the three months ended Sept. 30, compared to earnings of $18 million or one cent per share in the same period last year.
Partly because of a dramatic decline in sales volumes, third-quarter revenues dropped sharply to $2 billion from $2.26 billion in the equivalent 1990 period. David Kerr, Noranda’s president and chief executive officer, attributed the revenue decline to the strong Canadian dollar and relatively high interest rates and inflation.
For the nine months ended Sept. 30, Noranda reported a loss of $24 million or 37 cents a share on revenues of $6.5 billion compared to a profit of $133 million or 51 cents a share on revenues of $7.3 billion in the 1990 period. While Noranda is clearly being weighed down by forestry and paper products, low metals prices and a lengthy strike at 64.6% owned Brunswick Mining and Smelting (TSE) forced Noranda Minerals to swallow a $5-million third-quarter loss. That compares to a $51-million profit in the 1990 period. In the first nine months of this year, profits at Noranda Minerals declined to $31 million from $187 million a year ago; and at a 2-hour presentation President Alex Balogh said Brunswick may be sold if the situation doesn’t improve.
However, evidence that the market was anticipating these results was provided by the listless trading activity which followed their Oct. 25 release. Trading on 27,958 shares, the issue was down 13 cents to $17.25 in a 52-week range of $20.38 and $14.13.
At Sept. 30, Noranda’s long-term debt totalled $4.46 billion, up slightly from $4.4 billion at Dec. 31, 1990.
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