Freeport expects lower profits in 2nd quarter

Freeport expects lower profits in 2nd quarter

SYDNEY (Reuter): Freeport McMoran Copper and Gold Inc said yesterday that it expects its second quarter 1996 financial results to be affected by lower copper prices.

The results would be affected despite excellent sales levels of copper and gold and significantly improved total unit cash production costs, equal to about US$0.15 a pound, Freeport said.

New Orleans-based Freeport said it expected to report lower second quarter 1996 earnings per share compared with the $0.20 a share reported in the second quarter of 1995.

Freeport said it expected to report a price of about $0.90 a pound for essentially all of its second quarter copper sales.

Freeport is engaged in exploration, mining and milling of copper, gold and silver in Irian Jaya, Indonesia and the smelting and refining of copper concentrates in Spain.

Freeport said its operations continued to perform well, with throughput exceeding 125,000 metric tones a day.

Expansion and exploration activities would not be affected by recent developments in the copper market, Freeport said.

Copper prices tumbled in June in wake of the Sumitomo Corp trading scandal as copper traders, fearful of a large tonnage of metal being unleashed on the market, sought to sell out of the copper positions.

The September COMEX copper contract closed at $0.91.40 cents a pound on Tuesday.

The $0.90 a pound was based on sales of its copper concentrates, which were provisionally priced at the time of shipment, adjusted at the end of each month based on prevailing prices, and then final priced under contract terms, the company said

Additionally, copper sold in concentrate form in the first quarter and not final priced at June 30 would also be re-priced at $0.90 a pound.