Rio posts profit for 35th straight year

For the 35th consecutive year, Rio Algom (TSE) has showed its mettle by posting earnings and dividends.

Nevertheless, earnings decreased 14%, compared with 1992, while revenues gained 5% for the same period.

Fiscal 1993 earnings dropped to $33.9 million (73 cents per share) from $39.4 million (85 cents per share) in the previous year, while revenues rose to $955.4 million from $905.1 million.

The decreased earnings are mainly a reflection of the lower realized copper price. In the first nine months in 1993, the red metal averaged US90 cents per lb., compared with US$1.05 in the same period in 1992.

To raise funds, Rio sold two assets in the course of the year. In September, it surrendered its potash division to Potash Corp. of Saskatchewan (TSE) for $160 million.

It also sold its stake in El Condor Resources (VSE) for $22 million. El Condor has a 60% interest in the South Kemess copper-gold project in north-central British Columbia.

Earnings for the fourth quarter rose to $11.2 million (25 cents per share) from $10.1 million (22 cents per share). Revenues in the period also rose, to $243.5 million, compared with $241.2 million in the fourth quarter of 1992. These sales, along with improvements in metals distribution and the relative strength of the U.S. dollar, bolstered Rio’s year-end results. Base metal sales were helped by the recovering U.S. and Canadian economies. To increase copper production, Rio started cranking out copper cathode from the Cerro Colorado mine in Chile. Reserves are 79 million tonnes averaging 1.3% copper.

Production last year consisted of 115 million lb. copper, 1.3 million lb. molybdenum, 1.8 million lb. uranium and 522,000 lb. coal.

Rio announced a fourth-quarter dividend of $1.45 for each $5.80 preferred share.