Noranda Inc. reported a fourth quarter loss of $50 million before taking into account $623 million of writedowns and other items. This compares to a loss in the fourth quarter of 2001 of $84 million.
The quarter's results reflect improved margins for its business units from higher metal prices, especially for nickel, and lower operating costs as a result of measures taken to improve productivity. This improvement was achieved despite lower sales of copper due to the ongoing strike at the company’s Horne smelter.
During the quarter, the company's magnesium plant was written down by $630 million and other closure, tax, reclamation and restructuring provisions amounting to $81 million were recorded.
For the year the net loss was $700 million compared to a net loss of $92 million in 2001.
"We made substantial improvements in cash flow generated by our assets despite metal markets at decade-lows," said Derek Pannell, Noranda's president and CEO. "We reduced overall corporate costs by over $100 million and the increased production of copper and aluminum has positioned us to take full advantage of strengthening metal prices."
Revenues for the year were greater than 2001 as a result of the inclusion of a full year of production from the Antamina and Lomas Bayas mines as well as higher sales volumes from both the company's primary aluminum and foil operations. These increases were offset by the strike at the Horne smelter, lower revenues due to the sale of the CEZ refinery in May 2002, and lower realized prices for zinc, aluminum and precious group metals.
The cost to purchase raw materials was lower year over year due in large part to the strike at the Horne smelter and the closure of the Gaspe smelter.
The Canadian Copper and Recycling business produced an operating loss of $38 million in the quarter and $112 million for the full year compared to losses of $95 million and $120 million in the comparable periods of 2001.
"Most of the major changes to reduce costs and improve efficiencies are behind us. In 2003, we will have much lower capital expenditures, increased production capacity and cost efficiencies that will be in effect for the full year," concluded Pannell.