New York metals giant Amax (NYSE) succeeded in weathering both the recession and weak aluminum prices to post a substantial profit during fiscal 1990, albeit a smaller one than in 1989. For the year ended Dec. 31, Amax had unaudited net earnings of US$225.9 million or US$2.58 a share, compared with earnings of US$360.4 million or US$4.19 a share in the same period last year.
Revenues and operating earnings in 1990 both declined because of a drop in the average price of primary aluminum to US74 cents per lb. from US88 cents in 1989. The price of manufactured aluminum products was also down from the previous year’s levels.
As a result, 1990 revenues decreased slightly to US$3.8 billion from US$3.9 billion a year ago, while operating earnings of US$402.6 million compared with US$590.9 million in 1989.
In the three months ended Dec. 31, Amax reported unaudited net earnings of US$60.1 million or 69 cents per share, compared with US$58.54 million or 67 cents per share in the fourth quarter of 1989. Fourth2Dquarter revenues increased to US$942.5 million from US$903.2 million in the year-earlier period because of improvements in Amax aluminum, gold and molybdenum and oil and gas operations.
Amax’ aluminum division enjoyed the third best earnings year in its history with operating earnings of US$296 million on sales of US$2.5 billion, said Allen Born, chairman and chief executive officer.
According to Born, 1990 results include proceeds from settlement of a coal supply agreement and insurance proceeds from claims for damage caused by Hurricane Hugo in 1989 to the Mt. Holly, S.C., aluminum plant.
These were partly offset by a reduction in the carrying value of 87% owned Amax Gold’s (TSE) investment in Canamax Resources (TSE) and a charge for downsizing and decentralizing certain corporate staff functions. Amax has agreed to purchase Amax Gold’s 44% stake in Vancouver-based Canamax. Amax Gold 3 months ended Dec. 31, 1990 1989 Revenue $942,500 $903,200 Net earnings 60,100 58,500 per share 0.69 0.67 12 months ended Dec. 31 Revenue $3,800,000 $3,900,000 Net earnings 225,900 360,400 per share 2.58 4.19
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