TORONTO (miningweekly.com) – US-based diversified miner Freeport-McMoRan (FCX) on Thursday reported a net loss of $1.85-billion for the second quarter of the year, compared with the net income of $482-million achieved in the second quarter of the previous year.
FCX’s net loss for the second quarter included net charges of $2-billion, reflecting the write-down of the carrying value of the company's oil and gas properties.
Revenue for the quarter fell by 23% year-on-year to $4.25-billion.
Second-quarter consolidated copper sales of 964-million pounds were in line with an April estimate of 960-million pounds and marginally lower than the 968-million pounds sold in the comparable quarter of 2014. Higher sales volumes were achieved in North America and Indonesia, but were offset by lower sales volumes in South America, as a result of the sale of Candelaria/Ojos in the fourth quarter of 2014 and lower output from Cerro Verde, in Peru, and El Abra, in Chile.
Consolidated gold sales totalled 352 000 oz, a significant improvement over the 159 000 oz produced in the comparable period last year, reflecting higher ore grades and operating rates at PT Freeport Indonesia.
Molybdenum sales fell to 23-million pounds in the quarter, down from 25-million pounds a year earlier, reflecting slowing demand in the metallurgic market for molybdenum, FCX said.
Second-quarter oil and gas sales totalled 13.1-million barrels of oil equivalent, including 8.6-million barrels of crude oil, 23.5-billion cubic feet of natural gas and 600 000 bbl of natural gas liquids. These were higher than the April estimate of 12.9-million barrels of oil equivalent, but were lower than second-quarter 2014 sales of 16-million barrels of oil equivalent, mainly owing to the sale of the Eagle Ford properties in June last year.
Consolidated sales for 2015 were expected to hit 4.2-billion pounds of copper, 1.3-million ounces of gold, 93-million pounds of molybdenum and 52.3-million barrels of oil equivalent.
FCX reported that the average realised price for copper fell 14% year-on-year to $2.71/lb in the second quarter, while the average realised gold price was down 9% to $1 174/oz and molybdenum prices fell 29% to $9.51/lb.
During the period, FCX again leaned on debt, lifting its total outstanding debt to $20.9-billion, up from $20.19-billion a year earlier. FCX’s debt swelled in 2013 when it acquired two oil and natural gas companies, as it sought to diversify its asset portfolio.
The company noted that it remained focused on managing costs and capital expenditure (capex) under volatile market conditions as it sought to strengthen its balance sheet.
Capex was expected to total $6.3-billion for the year, including $2.5-billion for major projects at mining operations and $2.8-billion for oil and gas operations.
At the end of the second quarter, FCX had consolidated cash of $466-million.
FCX’s NYSE-listed stock on Thursday fell 9.43% to $13.64 on a bleak day for commodities.