IMCO Recycling Inc. expects to report a net loss of about $3.2 million for the fourth quarter of 2001. These results include costs of $2.1 million due to an increase in the allowance for doubtful accounts related to customer bankruptcies, and to the closing of a zinc trading office in Germany at the end of last year.
In the first nine months of 2001, IMCO's net earnings totaled $706,000.
Don V. Ingram, chairman and CEO, said IMCO's financial results in the fourth quarter ``continued to be negatively affected, as they have been throughout 2001, by the lower level of U.S. product manufacturing. Demand for our aluminum and zinc products and services is derived from the industrial sector, and business activity there has been in a severe decline for well over a year,'' he said.
``The profitability of U.S. Zinc Corporation, a wholly owned subsidiary, moved down sharply in the fourth quarter as zinc prices reached a 20-year low and processing volume declined. A drop in aluminum prices also reduced margins in product sales transactions and lowered earnings from our aluminum segment.''
Looking forward, Mr. Ingram said the company ``has made great strides in reducing operating costs and working capital requirements as well as SG & A expense. Our financial results should improve significantly when customer demand returns to a more normal level.''
IMCO Recycling Inc. is the world's largest recycler of both aluminum and zinc. The company has 21 U.S. production facilities and owns an aluminum recycling plant in Swansea, Wales. It also holds a 50 percent interest in a joint venture in Germany that operates two recycling and foundry alloy plants and owns a majority interest in a joint venture which operates an aluminum recycling plant in Monterrey, Mexico.