London-based RTZ Corp (NYSE) reported net earnings of US$908 million ($3.68 per share) last year, down only 6% from its 1989 net earnings of US$964 million ($4.14 per share). Group sales totalled US$9.09 billion last year, compared with US$10.09 billion in 1989. The company attributed its lower earnings to weakness in the U.S. dollar, lower metal prices and a general malaise in the construction industry. The 9% drop in sales was attributed to the translation effect of a weaker U.S. dollar, lower metal prices and worsening market conditions in North America and Europe. Overall production of RTZ’s main metals and minerals was broadly in line with 1989.
Contributions to earnings by the company’s mining and metals operations declined 21% last year as average prices of many metals continued to retreat from high levels reached in 1989. Business and consumer confidence was weakened as recessionary trends developed in several major economies, and was further undermined by the Gulf crisis.
Although copper and gold remained the largest contibutors to RTZ’s earnings, their combined contribution was 11% lower last year than in 1989. The average 1990 copper price, at US$1.21 per lb., slipped 6% below the year-earlier level, while gold, at US$383 per oz., was marginally above the US$381 level in 1989.
RTZ’s copper production was 9% higher last year, while gold production was similar to 1989, despite continued closure of the Bougainville copper-gold mine.
The first shipment of copper concentrate was made from the company’s new Escondida mine on Dec. 31, 1991, six months ahead of schedule. The mine’s construction cost, less than US$850 million, was about 15% below budget.
Commenting on the outlook for 1991, RTZ Chairman Alistair Frame said the short-term prospects for the world economy remain clouded. “Notwithstanding the increased depth of the present downturn and the adverse impact it is having on our current trading, we remain confident over the medium-to-longterm,” he said.
RTZ had a total of 987.3 million shares issued and outstanding at Dec. 31, 1990.
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