Freeport-McMoRan to trim up to $10 billion debt

January 29
1:53 AM 2016

On Tuesday, Freeport-McMoRan said that it has planned to trim up to $10 billion debt through earnings from joint venture transactions and asset sales.

The Freeport-McMoRan website announced a net loss attributable to common shares of $4.1 billion for the fourth quarter of 2015, compared to a net loss of $2.9 billion in the previous year quarter. On a per share basis, the company's loss widened to $3.47 from $2.75 in the same period last year.

The company said its fourth-quarter net loss, excluding net charges, amounted to $21 million or $0.02 per share. Quarterly revenues decreased to $3.8 billion from $5.2 billion in the fourth quarter of 2014. Operating cash flows amounted to $612 million for the final quarter of 2015.

Operating loss for the three month period ended December 31, 2015, was $4.1 billion, wider than $3.3 billion reported in the prior-year period.

For the year 2015, the company reported a net loss attributable to common share of $12.2 billion, or $11.31 per share, compared to a net loss of $1.31 billion, or $1.26 per share in the previous year. Annual revenues dropped to $15.9 billion from $21.4 billion last year. Operating loss totalled $13.4 billion, compared to income of $97 million in the previous year.

Reuters quoted Jeremy Sussman, an analyst at Clarksons Platou Securities, as saying, "Even though it was a wild day, no real change at the end of the day. How Freeport fares in 2016 will have a lot to do with both copper and oil pricing and how the company shapes itself from a strategic standpoint."

Shares of Freeport-McMoRan have tumbled 80% in the past year from the hex of dropping copper and oil prices as well as $20 billion in debt, Reuters noted.

In December 2015, the company suspended the annual common share dividend. The company's stock ended Tuesday trading session at $4.20, up 6.60% or $0.26 and matched with other major copper stocks.

The Financial Times noted that sale of Freeport's assets would be of gigantic interest to miners like BHP Billiton and Rio Tinto. A slowdown in Chinese GDP coupled with the falling oil price has pushed the company's shares down by over two-thirds in 2015.

Among the peers in the industry, Southern Copper Corp. is expected to report earnings of $1.03 per share for the year 2015, according to G.Nelson, an analyst at BB&T Corp.

In addition, US-based mining group's borrowing are comparatively high, with total debt of 4.67 times earnings excluding tax, depreciation, interest and amortisation. The company said that it plans to maintain a robust financial position, with the main focus on cutting debt and that its Board would move forward to examine the financial strategy on a constant basis.

© 2023 VCPOST, All rights reserved. Do not reproduce without permission.


Join the Conversation

Subscribe to VCpost newsletter

Sign up for our Deals of the Day newsletter.
We will not spam you!

Real Time Analytics