Lower nickel and zinc prices, coupled with a less favorable U.S. dollar exchange rate and higher depreciation charges, led to a 39% drop in operating profit at Falconbridge last year. The company, owned jointly by Noranda (TSE) and Trelleborg AB of Sweden, reported 1990 net earnings of $91 million, down sharply from $357 million in 1989.
Falconbridge said the lower profit reflected an increase in interest expense which rose to $243 million, up from $77 million in the previous year. Revenues totalled $2 billion last year, down from $2.4 billion in 1989.
The company’s total capital expenditures rose to a record $233 million in 1990, up from $225 million in 1989. Cash generated from operations was sufficient to fund the capital expenditures.
In 1990, the company sold 62,042 tons of nickel at US$4.17 per lb., compared with 62,153 tons at $5.47 a year earlier, while its ferronickel sales totalled 32,619 tons at $3.93 per lb. last year compared with 33,942 tons at $5.83 in 1989.
Copper sales, at 207,507 tons, averaged $1.19 per lb., up from 199,131 tons at $1.18 in the previous year. Zinc sales were 136,979 tons at 70 cents per lb. last year, compared with 140,395 tons at 78 cents in 1989.
In addition to its 1990 base metal sales, Falconbridge also sold 115,930 tons of zinc concentrates, down from 133,121 tons in 1989. .
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