Noranda Inc. reported a fourth quarter loss of $62 million. The net earnings for the fourth quarter of 2000 were $71 million.
The quarter's results reflect the impact of low prices for Noranda's metals and restructuring charges that total $71 million. Charges include the costs associated with the closing of the Warsaw aluminum wheel manufacturing facility in Kentucky, and a provision to reduce the carrying value of the company’s Gaspe secondary smelter, scheduled to be closed this April.
For the year the net loss was $92 million compared to net earnings of $293 million a year ago.
Revenues for the year decreased year-over-year by $805 million or 12 percent to $6.152 billion. Average prices for copper, zinc, aluminum, and nickel, declined by 13 percent, 22 percent, 7 percent and 31 percent, respectively.
Revenue was also affected by lower sales volumes, a strike at the nickel operations in Sudbury, Ont., and a voluntary production cutback at the Falcondo ferronickel facility in the Dominican Republic.
Operating costs were similar to 2000, while the cost of purchased raw materials declined reflecting the impact of lower metal prices.
"2001 was a mixed year for Noranda," said David Kerr, Noranda's chairman and CEO. "The severe drop-off in global economic activity had a significant negative impact on our financial results. Nevertheless, we accomplished several important objectives in the execution of our long-term strategy and we set in motion key initiatives that will positively alter our cost structure as we move forward."
The company noted that operating margins in its recycling division were damaged by lower commodity prices, especially for copper, platinum and palladium; lower treatment charges reflecting the impact of an expected reduction of copper mine concentrate production, reduced availability of high-margin electronic materials resulting from a slowdown in the electronic manufacturing sector, and reduced North American copper sales which resulted in lower premiums on copper cathode sales.
The company noted that the closing of the Gaspe smelter will lower the cost structure of the recycling business and increase cash flow.