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Noranda reports fourth quarter earnings of $64 million
Net Earnings for the Year 2003 of $34 million
TORONTO, Feb. 11 /PRNewswire-FirstCall/ --
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Investors, analysts and other interested parties can access Noranda's
Supplemental Information Package and its quarterly teleconference on its
website at http://www.noranda.com/ under the For Investors and Presentations
and
Webcasts sections. The teleconference will be held on Wednesday,
February 11th 2004 at 8:30 a.m. Eastern Standard Time. To participate by
conference call, dial (416) 641-6714 for local and overseas and
1-800-387-2195 toll free in North America. All dollar amounts are in U.S.
dollars unless otherwise noted.
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2003 Highlights
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- Returned to profitability in the fourth quarter with net earnings of
$64 million, on the strength of the improved operating base and metal
prices.
- Net income of $34 million for 2003, an increase of $481 million over
2002.
- Income generated by operating assets increased by $295 million or
almost 260% for the year.
- Achieved operating goals set for 2003:
- set new production records at the nickel operations, the Lomas
Bayas copper mine, the Brunswick zinc mine and the aluminum
smelter and foil plants
- renewed eight collective agreements, including ending an 11-month
strike at the Horne smelter, gaining flexibility in the contract
- Capacity expansions:
- enhanced growth opportunities by advancing the development of new
production capacity at the Collahuasi, Lomas Bayas, Kidd Creek,
Montcalm and Koniambo projects
- achieved on-schedule, on-budget completion of the expansion of the
Altonorte smelter and subsequent operation at higher than design
capacity levels
- Exploration successes:
- Added 11 million tonnes of nickel resources at Sudbury, Ontario
and Raglan, Quebec
- Inferred resources of 11.7 million tonnes at Nickel Rim South
(up 87% in 2003) and 6.3 million tonnes at Fraser Morgan
(up 158% in 2003)
- Issued debt and equity to strengthen balance sheet and to prepare for
future investment:
- reduced net debt by $362 million
- net debt-to-total capitalization ratio at 43% compared to 54% at
year-end 2002.
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Fourth Quarter Year
$ millions, except ---------------- ----------------
per share information 2003 2002 2003 2002
-------------------------------------------------------------------------
Revenues 1,324 887 4,657 3,873
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Income generated by operating
assets(x) 236 41 409 114
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Net income (loss) 64 (442) 34 (447)
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Basic and diluted earnings (loss)
per common share $0.21 $(1.86) $0.04 $(1.93)
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Weighted average shares
outstanding - 000s 294,432 239,940 261,618 238,824
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(x) Defined as earnings before interest, corporate and general
administration, research, development, exploration, minority
interest, taxes, restructuring costs and gain on sale of investments
Commentary
Mr. Derek Pannell, Noranda's President and CEO stated: "I am particularly
pleased with the fourth quarter results, which are indicative of Noranda's
increased ability to generate significant earnings and cash flow as a result of
new capacity now on stream and improved metal prices.
"Earnings in 2004 should be further enhanced as expansion projects are completed
and if current metal prices persist."
"Our outlook for 2004 is for nickel markets to remain strong and the
fundamentals for copper and zinc to continue to improve as higher demand is
expected to outstrip supply and further reduce inventories. Noranda's strategy
is to operate its assets as efficiently as possible and maintain a healthy
financial position that will allow the Company to capitalize on strategic
opportunities and pursue its growth objectives."
FINANCIAL RESULTS
Net income was $64 million or $0.21 per common share for the fourth quarter of
2003 and $34 million or $0.04 per share for the year. Comparably in 2002, the
Company reported a net loss of $442 million or $1.86 per common share in the
fourth quarter and a net loss of $447 million or $1.93 per common share for the
year. The return to profitability in 2003 is attributed to increased production
from recently completed projects, higher achieved metal prices and cost-saving
measures.
In the fourth quarter, prices for all of Noranda's main metals improved
significantly, with nickel leading the group with a 32% increase over the third
quarter of the year, building on a trend which started at the beginning of 2003.
This trend has continued into 2004 with current prices surpassing year-end price
levels, making the outlook for 2004 very positive.
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Estimated
Current Fourth Quarter Year
--------- ---------------- ----------------
Realized Metal Prices 2004 2003 2002 2003 2002
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(US$ per pound)
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Copper 1.16 0.93 0.72 0.82 0.74
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Nickel 6.90 5.57 3.28 4.40 3.14
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Zinc 0.51 0.47 0.40 0.43 0.40
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Aluminum 0.77 0.68 0.65 0.68 0.65
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Lead 0.41 0.33 0.21 0.27 0.23
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Cobalt 25.00 11.39 6.57 9.42 7.02
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Revenues were higher by 50% and 20% for the fourth quarter and full year
respectively when compared to the same periods in 2002. The increase is
attributed to higher prices for allof the metals that Noranda produces and
higher volumes of nickel, zinc and both primary and fabricated aluminum.
The cost of operations increased in both the fourth quarter and year when
compared to 2002, reflecting primarily the impact of the stronger Canadian
dollar on costs at the Canadian operations and higher production levels from
recently-completed projects. The cost to purchase raw materials was higher
year-over-year mainly as a result of increased feed requirements at the expanded
Altonortesmelter and higher metal prices which increased the cost to purchase
third-party material.
REVIEW OF OPERATIONS
Copper
The Copper business, a fully integrated producer of copper metal and
concentrates, generated income from operating assets of$81 million in the
fourth quarter and $160 million for the full year of 2003. This compares to $11
million and $58 million respectively for the same periods of 2002. The average
LME price for copper, excluding premiums, was $0.93 per pound for the quarter
and $0.81 for the year. This compares to current trading ranges between $1.10
and $1.16 per pound. The integrated cost to produce a pound of copper in
Noranda's Copper business was lower at $0.30 per pound when compared to 2002 at
$0.34 reflecting increased profitability at the processing facilities.
- Mined production totaled 360,000 tonnes in 2003. Record production at
Lomas Bayas and higher year-over-year production at Kidd Creek was
offset by the expected lower output at Collahuasi and Antamina.
Higher premiums are expected on the Lomas Bayas sales, in 2004, as a
result of the mine achieving registration on the London Metal
Exchange and Comex during 2003.
- Copper anode production from the Altonorte smelter increased 77% to
260,000 tonnes in 2003 compared to 2002. The Altonorte smelter is one
of the lowest cost smelters in the world.
- Copper cathode production from the Canadian metallurgical facilities
was negatively affected by an Ontario-wide power outage in August and
start-up difficulties following a scheduled shutdown.
- In 2004, mined production is expected to increase by almost 20% to
430,000 tonnes. The forecast increase is a result of the completion
of the expansion of the Collahuasi facility, improved access to
higher grade ore at the Antamina mine as the remaining lake residue
is removed and initial production from the Kidd Mine D project. All
of these projects are on schedule for production in the second half
of 2004.
Nickel
The Nickel business generated income from operating assets of $143 million in
the quarter and $296 million for the full year 2003. This compares to $28
million and $94 million respectively for the same periods of 2002. The fourth
quarter's average LME nickel price of $5.62 per pound was almost 75% above that
of the fourth quarter of 2002. Nickel is currently trading on the LME in the
$6.75 to $7.00 per pound range compared to the average price for 2003 of $4.37.
The price of cobalt, which is treated as a by- product credit in the Nickel
business, increased by 15% in the fourth quarter and is currently trading in the
$25.00 to $27.00 per pound range. The cash operating cost to produce a pound of
nickel at the INO and Falcondo facilities was $2.64 and $3.04, respectively.
- Mined production of 76,000 tonnes exceeded the level in 2002. Higher
output attributed to better grades at Raglan and a full year of
operation at Falcondo fully offset lower production from the Sudbury
mines which resulted from lower grades, an increase in ore stockpile
and mining-related issues.
- The Sudbury smelter established new production records for annual
matte production of nickel and copper at 59,800 tonnes and
20,800 tonnes respectively. The increase in production is due to the
successful efforts to acquire spot lots of custom feeds, which more
than offset the lower feed volume from the Sudbury mines. The
production and maintenance workers at Sudbury began strike action on
February 1, 2004, following the expiration of the collective
agreement on January 31.
- Refined production from the Nikkelverk refinery totaled
77,200 tonnes, 13% higher than that of 2002.
- The pre-strike 2004 forecasts are for 50,400 tonnes of mined
production from INO, 27,000 tonnes of ferronickel from Falcondo and
75,000 tonnes of refined production from Nikkelverk.
Zinc
The Zinc business reported improved results but nevertheless incurred losses
from operating assets, including non-cash depreciation and depletion, of $5
million for the fourth quarter of 2003 compared to $14 million in the same
period last year. For the full years, the business recorded losses from
operating assets of $68 million for 2003 and $52 million for 2002. The average
LME zinc price was $0.42 per pound in the quarter up from an average of $0.35
per pound last year. The fully integrated cash cost to produce a pound of zinc
was $0.32 per pound.
- Mined production was 9% higher year-over-year at 396,000 tonnes due
to record zinc recovery at the Brunswick mine and higher grades at
the Bell Allard mine.
- The Brunswick Smelter restarted operations, as planned, at the end of
October. The smelter operates on an eight-month seasonal basis
treating lead concentrate from the Brunswick mine and external
sulphate residues.
- Mine production in 2004 should approximate the 2003 level as higher
planned production at the Brunswick mine is expected to offset the
depletion of economic ore reserves at the Bell Allard mine.
Aluminum
The Aluminum business generated income from operating assets of $2 million in
the fourth quarter of 2003 and $20 million for the full year. In 2002, the
business reported operating income of $3 million for the fourth quarter and $34
million for the year. The average LME aluminum price for 2003 was $0.65 per
pound, up from $0.61 a year ago. However, this modest increase in price was
offset by the higher cost of power on a new contract which came into effect in
the second quarter. Noranda's cash cost to produce a pound of aluminum was $0.55
per pound.
- The primary smelter achieved a record production year, which resulted
in higher sales volumes compared to 2002. The market for value-added
products was softer during the year, accounting for only 85% of total
sales.
- Shipments of foil products increased 15% in 2003 as the ramp-up of
the new foil plant continued and the Company increased its market
share in most product lines.
- Demand for value-added and foil products began to strengthen in the
fourth quarter and is expected to continue to improve through 2004.
The ramp-up of production at the foil plant will continue in step
with the increasing demand and output from the primary smelter is
expected to remain relatively unchanged.
New Production Capacity Under Development
Noranda's growth focus remains on the development of high-quality, world-class
copper and nickel projects that can provide superior returns to shareholders. In
addition to the projects outlined in this release that are currently under
development, Noranda continues to review solid, low-risk opportunities to expand
the mines and extend the copper ore reserves efficiently with minimal capital
investment at the Collahuasi and Lomas Bayas mining operations. These
development opportunities are generally lower-risk in nature as they are
integrated with current operations in known environments and geological areas.
Similarly, around the Sudbury operations and the Raglan mine, our exploration
efforts have identified several areas to add to the nickel reserves and further
extend the mine life in these current areas of operation.
At Collahuasi, the project to move the operations from the Ujina pit to the new
Rosario open pit and expand the Ujina concentrator to 110,000 tonnes per day of
ore, up from 70,000 tonnes per day, is on schedule and on budget. The project is
expected to achieve mechanical completion in June 2004. Construction work was
77% complete by the end of 2003, with the civil work 100% complete and the
mechanical and electrical work well advanced.
The Kidd Creek Mine D project, which will give access to an additional 10.3
million tonnes of reserves and stabilize production and costs, progressed on
schedule during the year with the first production expected to begin by the end
of 2004.
Construction on the Montcalm nickel project located near Timmins, Ontario was
started in the fourth quarter. The project, with 5.1 million tonnes of resources
grading 1.46% nickel and 0.71% copper, is expected to commence production in the
second quarter of 2005 and produce 8,000 tonnes of nickel annually for seven
years. The net capital cost to develop the project, after pre-production
revenues, is estimated at Cdn$100 million, and includes Cdn$19 million for
working capital. The return on investment is expected to be greater than 15%,
calculated at conservative long-term nickel prices.
In Sudbury, at our Nickel Rim South expansion, additional surface drilling
continues to define the resource, whichremains open to the northeast. A
decision on the feasibility study for the exploration program has been delayed
until the labour dispute in Sudbury has been resolved. The total resource
estimate now stands at 11.7 million tonnes grading 1.6% nickel and3.7% copper.
Work on the Koniambo project in New Caledonia continues to advance. The bankable
feasibility study is expected to be completed by the third quarter of 2004.
Discussions with the French Government about the financing structure of the
project continue to progress. In parallel, work is advancing on the project
financing. The partners intend to be in a position to make a decision regarding
the project's development by the end of 2004.
Capital Initiatives
At year end, cash resources stood at $630 million and net debt at $2.7 billion.
The net debt-to-equity ratio has improved to 43% from 54% at the end of 2002. In
addition, the Company has over $1 billion of consolidated undrawn committed bank
lines.
During the year, the Company deployed$327 million in high-return investment
projects and $162 for the maintenance of existing operations. The Kidd Mine D
copper mine, the Montcalm nickel project, the expansion of the Collahuasi copper
facility and the Koniambo nickel project were all advanced toward the production
stage. For 2004, the Company is slated to invest a further $340 million in
internal expansions of current assets with high-invested returns and $255
million in the maintenance of operations.
During the year, Noranda enhanced its liquidity through various initiatives
including:
- the sale of its remaining 11,984,900 Priority Units of the Noranda
Income Fund at Cdn$9.85 per unit to a syndicate of underwriters,
generating an after-tax gain of $28 million
- the sale of $350 million of 6%, 12-year notes
- the sale of $250 million of 12-year notes by Noranda's partially-
owned subsidiary. The notes, which are unsecured and bear a coupon
rate of 5.375% per annum, mature on June 1, 2015
-the issue of six million cumulative preferred shares to the public
for gross proceeds of $99 million. The shares pay a 6.50% annual
dividend
- the issue of 48.5 million new common shares for net proceeds of
$431 million
Market Review
Copper: The improved market sentiment for copper was supported by mine
disruptions, smelter cutbacks, strong Asian demand, and declining metal stocks.
The weakening U.S. dollar has had a profound impact on U.S. dollar-based metal
prices and accounted for a substantive part of the overall increase. China
continues to drive global metal demand and its copper consumption for 2003 is
expected to total 3.1 million tonnes, a 22% increase over 2002. Total exchange
inventories dropped 464,500 tonnes to end the year at 793,000 tonnes. This was
partially offset as Codelco, a major copper producer, stockpiled 200,000 tonnes
of copper in response to high exchange inventory levels earlier in the year.
Despite the release of the Codelco stockpile and new, expanded and restarted
mine production planned for the second half of 2004, the overall market is
expected to end in a slight deficit for another year. Continued strong demand in
China, marked improvement in the U.S. economy coupled with relatively low levels
of unused capacity and few new mine projects, are expected to create further
upside for the copper price and premiums.
Nickel: The LME nickel price rose from a low of $3.27 per pound at the start of
the year to $7.55 per pound by year end with much of the increase occurring in
the second half of the year.
Supply-side fundamentals were the main driver behind this run-up, complemented
by the very strong demand for metals in China. In 2003, world production of
nickel grew by only 1.7%, less than half the growth seen in 2002. Disruptions at
producers reduced supply in the first half of the year. This was followed by a
three-month strike at Inco's Sudbury operations during the summer, which removed
approximately 30,000 tonnes of nickel from the market.
As a robust period of demand growth is forecast in 2004, the nickel market is
expected to remain in significant deficit.
Zinc: Prices in 2003 traded in a narrow range of $0.34 per pound to $0.37 for
the first nine months, before staging a strong recovery in the fourth quarter to
finish the year at $0.46 per pound. The price improvement is partly attributable
to weakness in the U.S. dollar, as well as bullish investor sentiment for an
improved market outlook in 2004.
While global smelting capacity continues to expand, principally in China, actual
refined production levels in 2003 were believed to be unchanged from 2002 levels
as a result of the tight zinc concentrate supply. Demand remains very strong in
China, such that China is now a net importer of zinc.
Most analysts expect that limited mine supply growth combined with higher metal
demand will result in a significant supply deficit in 2004 and higher average
prices than 2003 levels.
Aluminum: The aluminum price ranged from a low of $0.60 per pound to a high of
$0.72 per pound during 2003. The weakness of the U.S. dollar coupled with
speculative fund buying propelled the price to its highest level in 34 months.
In 2004, Chinese exports could be affected by the reduction in export rebates,
rising alumina costs and regional power constraints. Coupled with the
anticipated demand growth from the economic recovery, the aluminum market could
be in a more balanced market position in 2004.
Dividends
The following dividends have been declared:
Security Dividend Amount Record Date Payable Date
---------------- ------------------ ----------------- --------------
Common shares Cdn$0.12 per share February 27, 2004 March 15, 2004
Preferred Series
F shares Floating rate February 27, 2004 March 12, 2004
Preferred Series
F shares Floating rate March 31, 2004 April 12, 2004
Preferred Series
F shares Floating rate April 30, 2004 May 12, 2004
Preferred Series Cdn$0.38125
G shares per share April 15, 2004 May 1, 2004
Preferred Series Cdn$0.40625
H shares per share March 15, 2004 March 31, 2004
Outlook
"All indicators suggest that the Chinese industrial production, which has
fuelled the improvement in economies and the metals markets, is sustainable and
that this is the start of a strong upcycle for our industry. More than ever
Noranda is well positioned to benefit as both our production and financial
positions are strong and we have an enviable pipeline of projects and new
capacity that can be brought on stream relatively quickly and with minimal
capital investment," concluded Mr. Pannell.
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This news release contains forward-looking statements concerning the
Company's business and operations. The Company cautions that, by their
nature, forward-looking statements involverisk and uncertainty and the
Company's actual results could differ materially from those expressed or
implied in such statements. Reference should be made to the most recent
Annual Information Form for a description of the major risk factors.
Noranda is a leading copper and nickel company with investments in
fully-integrated zinc and aluminum assets. The Company's primary focus is the
identification and development of world-class copper and nickel mining deposits.
It employs 15,000 people atits operations and offices in 17 countries and is
listed on The New York Stock Exchange and The Toronto Stock Exchange (NRD).
Note: This press release is also available at http://www.noranda.com/. All
dollar amounts are in U.S. dollars unless otherwise noted.
ATTACHMENTS
NORANDA INC.
CONSOLIDATED RESULTS
(US$ millions)
Twelve Months Ended
Fourth Quarter December 31
------------------- -------------------
2003 2002 2003 2002
--------- --------- --------- ---------
Revenues $ 1,324 $ 887 $ 4,657 $ 3,873
--------- --------- --------- ---------
Operating expenses
Cost of operations 509 452 2,024 1,879
Purchased raw materials 460 260 1,744 1,390
Depreciation, amortization
and reclamation 119 134 480 490
--------- --------- --------- ---------
1,088 846 4,248 3,759
--------- --------- --------- ---------
Income generated by operating
assets 236 41 409 114
Interest expense, net 21 27 129 98
Corporate and general
administration 19 15 58 58
Research, development and
exploration18 9 51 49
Minority interest in earnings
of subsidiaries 43 12 89 26
--------- --------- --------- ---------
Income (loss) before undernoted 135 (22) 82 (117)
Taxes (recovery) 54 (124) 24 (168)
Restructuring costs 21 546 62 561
Gain on sale of investment (4) (2) (38) (63)
--------- --------- --------- ---------
Net income (loss) 64 (442) 34 (447)
Dividends on preferred shares
and interest on convertible
debentures 1 4 24 13
--------- --------- --------- ---------
Income (loss) attributable
to common shares $ 63 $ (446) $ 10 $(460)
--------- --------- --------- ---------
Basic and diluted earnings
(loss) per common share - $ $ 0.21 $ (1.86) $ 0.04 $ (1.93)
--------- --------- --------- ---------
Weighted average shares
outstanding, basic - 000s 294,432 239,940 261,618 238,824
Note: Effective July 1, 2003, Noranda adopted the US dollar as its
reporting and functional currency. This change has been reflected
on a retroactive basis.
NORANDA INC.
CONSOLIDATED BALANCE SHEETS
(US$ millions)
Actual
-------------------
Dec. 31 Dec. 31
2003 2002
--------- ---------
Assets
Current assets
Cash and cash equivalents $ 630 $ 293
Accounts receivable 576 476
Metal and other inventories 1,179 896
--------- ---------
2,385 1,665
Operating capital assets 4,682 4,718
Development projects 973 537
Investments and other assets 205 182
--------- ---------
$ 8,245 $ 7,102
--------- ---------
Liabilities and equity
Current liabilities
Accounts and taxes payable $ 903 $ 720
Debt due within one year 431 335
--------- ---------
1,334 1,055
Long-term debt 2,893 3,014
Future income taxes 54 49
Reclamation, pension and other provisions 414 367
Stockholders' interest
Interest of other shareholders 914 759
Shareholders' equity 2,636 1,858
--------- ---------
$ 8,245 $ 7,102
--------- ---------
--------- ---------
NORANDA INC.
CONSOLIDATED STATEMENTS OF CASHFLOWS
(US$ millions)
Twelve Months Ended
Fourth Quarter December 31
------------------- -------------------
2003 2002 2003 2002
--------- --------- --------- ---------
Cash realized from (used for):
Operations
Earnings (loss) $ 64 $ (442) $ 34 $ (447)
Charges (credits) not affecting
cash:
Depreciation and amortization 111 101 447 435
Future income taxes 15 (128) (2) (188)
Minority interests in earnings
of subsidiaries 43 12 89 26
Earnings in associates net of
dividends received 2 (1) 7 (2)
Other (37) 509 2 524
--------- --------- --------- ---------
198 51 577 348
Net change in accounts receivable,
inventory and payables (72) 148 (164) 32
--------- --------- --------- ---------
126 199 413 380
--------- --------- --------- ---------
Investment activities
Capital investments (151) (151) (489) (528)
Investments and advances - (55) (24) (116)
Dispositions 8 (1) 99 265
--------- --------- --------- ---------
(143) (207) (414) (379)
--------- --------- --------- ---------
Cash before financing activities (17) (8) (1) 1
Financing activities
Long-term debt, including
current portion
Issued 7 76 717 615
Repaid (89) (17) (807) (373)
Issue of shares - common 8 2 439 2
Exercise of stock options - - - (2)
Issue of shares - preferred 1 - 94 -
Dividends paid (16) (21) (92) (108)
Issue of shares - minority
shareholders, net 16 8 18 8
Dividends paid to minority
shareholders (8) (7) (31) (29)
--------- --------- --------- ---------
(81) 41 338 113
--------- --------- --------- ---------
Cash generated (used) (98) 33 337 114
Cash, beginning of period 728 260 293 179
--------- --------- --------- ---------
Cash, end of period $ 630 $ 293 $ 630 $ 293
--------- --------- --------- ---------
NORANDA INC.
PRODUCTION VOLUMES
Fourth Quarter Year Ended Dec. 31
------------------- -------------------
2003 2002 2003 2002
--------- --------- --------- ---------
Mine Production
(tonnes, except as noted)
--------------------------
100% basis,
except as noted
---------------
Copper
Kidd Creek 13,927 12,650 46,409 45,434
Matagami 1,936 1,883 7,829 7,256
Brunswick 1,989 2,394 8,688 8,918
INO 8,057 9,151 35,789 37,550
Antamina (33.75%) 21,229 28,332 85,188 111,599
Collahuasi (44%) 40,375 45,723 168,578 185,014
Lomas Bayas 15,383 15,421 60,427 59,304
Other 4,174 5,119 17,002 19,527
--------- --------- --------- ---------
107,070 120,673 429,910 474,602
--------- --------- --------- ---------
Zinc
Kidd Creek 18,095 24,259 75,528 104,083
Brunswick 72,088 70,600 286,457 277,417
Matagami 30,848 21,728 109,679 84,792
Antamina (33.75%) 31,799 18,176 122,422 77,876
Other 995 2,053 8,045 9,004
--------- --------- --------- ---------
153,825 136,816 602,131 553,172
--------- --------- --------- ---------
Nickel 11,286 13,776 49,253 52,469
Ferronickel 6,490 6,091 27,227 23,303
Lead 20,365 18,982 77,724 76,177
Silver - 000 ounces
Kidd Creek 785 916 2,676 3,671
Brunswick 1,597 1,535 6,172 6,228
Matagami 103 117 396 329
Antamina (33.75%) 549 620 2,293 2,439
Other 39 79 247 268
--------- --------- --------- ---------
3,073 3,267 11,784 12,935
--------- --------- --------- ---------
Metal Production
(tonnes, except as noted)
--------------------------
Refined copper
CCR 74,597 59,612 235,425 244,252
Kidd Creek 32,933 36,059 132,364 146,526
Nikkelverk 9,592 9,280 35,852 30,632
Collahuasi (44%) 7,209 6,876 27,895 26,678
Lomas Bayas 15,383 15,421 60,427 59,304
--------- --------- --------- ---------
139,714 127,248 491,963 507,392
--------- --------- --------- ---------
Copper anodes
Gaspe - - - 29,612
Horne 39,125 30,367 132,739 147,020
Kidd Creek 35,874 35,955 131,405 144,094
Altonorte 79,180 43,966 260,971 147,059
--------- --------- --------- ---------
154,179 110,288 525,115 467,785
--------- --------- --------- ---------
Refined zinc
Kidd Creek 20,517 38,592 94,719 145,309
CEZ
(Noranda
Income
Fund) (100% - basis) 69,651 68,388 267,270 271,075
--------- --------- --------- ---------
90,168 106,980 361,989 416,384
--------- --------- --------- ---------
Refined nickel
Nikkelverk 20,568 21,296 77,183 68,530
Falcondo 6,490 6,091 27,227 23,303
--------- --------- --------- ---------
27,058 27,387 104,410 91,833
--------- --------- --------- ---------
Primary aluminum 60,985 60,496 244,044 236,459
Fabricated aluminum 34,267 31,542 146,716 127,911
Refined lead 12,988 28,348 60,776 90,167
Refined gold -
000 ounces 304 191 1,132 1,030
Refined silver -
000 ounces 7,917 7,963 30,311 40,439
NORANDA INC.
SALES VOLUMES & REALIZED PRICES
Fourth Quarter Year Ended Dec. 31
------------------- -------------------
2003 2002 2003 2002
--------- --------- --------- ---------
Metal Sales
(tonnes, except as noted)
--------------------------
100% basis,
except as noted
---------------
Copper
CCR 71,125 59,318 235,339 271,150
Kidd Creek 23,916 31,370 105,162 110,575
Nikkelverk 16,506 13,764 59,208 54,495
Antamina
(concentrates) (33.75%) 22,591 25,812 84,817 113,806
Collahuasi
(concentrates) (44%) 30,563 35,899 134,426 142,028
Collahuasi (44%) 9,076 13,858 33,721 45,496
Lomas Bayas 16,293 15,600 61,289 60,265
--------- --------- --------- ---------
190,070 195,621 713,962 797,815
--------- --------- --------- ---------
Zinc
Kidd Creek 21,307 39,719 110,592 148,418
Antamina
(concentrates) (33.75%) 26,928 14,408 100,142 71,632
Brunswick/Matagami
(concentrates) 82,873 71,776 335,059 256,949
--------- --------- --------- ---------
131,108 125,903 545,793 476,999
--------- --------- --------- ---------
CEZ (Noranda
Income
Fund) (100% - basis) 69,212 67,512 265,797 272,952
Nickel 20,468 20,468 78,978 71,153
Ferronickel 6,781 7,164 27,133 21,446
Aluminum
Primary aluminum -
shipments 64,795 61,312 246,737 242,289
Norandal -
shipments 34,267 31,542 146,716 127,911
Lead 11,609 30,391 60,452 90,896
Gold - 000 ounces 278 253 1,004 953
Silver - 000 ounces
CCR6,826 8,614 30,870 41,210
Kidd Creek 1,016 1,235 5,323 3,723
Antamina (33.75%) 490 530 1,921 2,210
--------- --------- --------- ---------
8,332 10,379 38,114 47,143
--------- --------- --------- ---------
Average Realized Prices -
($U.S. per pound, except as noted)
-----------------------------------
Copper 0.93 0.72 0.82 0.74
Nickel 5.57 3.28 4.40 3.14
Ferronickel 5.21 3.19 4.20 3.16
Zinc 0.47 0.40 0.43 0.40
Aluminum 0.68 0.65 0.68 0.65
Lead 0.33 0.21 0.27 0.23
Gold - (US$ per ounce) 396.95 319.49 362.97 308.00
Silver - (US$ per ounce) 5.21 4.52 4.89 4.60
Exchange Rate
(US$ (equal sign) Cdn$) 0.76 0.64 0.71 0.64
------------------------
NORANDA INC.
SEGMENTED INFORMATION
(US$ millions)
Fourth Quarter 2003
-----------------------------------------------
Copper Nickel Zinc Aluminum Other Total
------- ------- ------- -------- ------ -------
Revenues $ 765 410 117 173 (141) $1,324
-----------------------------------------------
Operating expenses
Cost of operations 203 127 66 108 5 509
Purchase of raw
materials 433 101 37 54 (165) 460
Depreciation,
amortization and
reclamation 48 39 19 9 4 119
-----------------------------------------------
$ 684 267 122 171 (156) $1,088
-----------------------------------------------
Income (loss) generated
by operating assets $ 81 143 (5) 2 15 $ 236
-----------------------------------------------
Interest expense, net (21)
Corporate and general
administration (19)
Research, development
and exploration (18)
Minority interest in
earnings of subsidiaries (43)
-------
Income before undernoted 135
Taxes (54)
Restructuring costs (21)
Gain on sale of investment 4
-------
Net income $ 64
-------
-------------------------------------------------------------------------
Capital investments $ 104 41 2 7 (3) $ 151
-------------------------------------------------------------------------
Fourth Quarter 2002
-----------------------------------------------
Copper Nickel Zinc Aluminum Other Total
------- ------- ------- -------- -------------
Revenues $ 502 251 72 162 (100) $ 887
-----------------------------------------------
Operating expenses
Cost of operations 170 151 53 94 (16) 452
Purchase of raw
materials 272 46 15 57 (130) 260
Depreciation,
amortization and
reclamation 49 26 18 8 33 134
-----------------------------------------------
$ 491 223 86 159 (113) $ 846
-----------------------------------------------
Income (loss) generated
by operating assets $ 11 28 (14) 3 13 $ 41
-----------------------------------------------
Interest expense, net (27)
Corporate and general
administration (15)
Research, development and
exploration (9)
Minority interest in
earnings of subsidiaries (12)
-------
Loss before undernoted $ (22)
Tax recovery 124
Restructuring costs (546)
Gain on sale of investment 2
-------
Net loss $ (442)
-------
-------------------------------------------------------------------------
Capital investments $ 72 23 - 19 37 $ 151
-------------------------------------------------------------------------
NORANDA INC.
SEGMENTED INFORMATION
(US$ millions)
Year ended December 31, 2003
-----------------------------------------------
Copper Nickel Zinc Aluminum Other Total
------- ------- ------- -------- ------ -------
Revenues$2,477 1,297 410 688 (215) $4,657
-----------------------------------------------
Operating expenses
Cost of operations 731 586 232 389 86 2,024
Purchase ofraw
materials 1,381 280 175 238 (330) 1,744
Depreciation,
amortization and
reclamation 205 135 71 41 28 480
-----------------------------------------------
$2,317 1,001 478 668 (216) $4,248
-----------------------------------------------
Income (loss) generated
by operating assets $ 160 296 (68) 20 1 $ 409
-----------------------------------------------
Interest expense, net (129)
Corporate and general
administration (58)
Research, development and
exploration (51)
Minority interest in
earnings of subsidiaries (89)
-------
Income before undernoted $ 82
Taxes (24)
Restructuring costs (62)
Gain on sale of investment 38
-------
Net income $ 34
-------
-------------------------------------------------------------------------
Total assets, excluding
cash and cash
equivalents $4,110 1,668 439 814 584$7,615
-------------------------------------------------------------------------
Capital investments $ 326 109 2 22 30 $ 489
-------------------------------------------------------------------------
Year ended December 31, 2002
-----------------------------------------------
Copper Nickel Zinc Aluminum Other Total
------- ------- --------------- ------ -------
Revenues $2,067 842 399 662 (97) $3,873
-----------------------------------------------
Operating expenses
Cost of operations 691 488 242 349 109 1,879
Purchase of raw
materials 1,109 146 144 241 (250) 1,390
Depreciation,
amortization and
reclamation 209 114 65 38 64 490
-----------------------------------------------
$2,009 748 451 628 (77) $3,759
-----------------------------------------------
Income (loss) generated
by operating assets $ 58 94 (52) 34 (20) $ 114
-----------------------------------------------
Interest expense, net (98)
Corporate and general
administration (58)
Research, development and
exploration (49)
Minority interest in
earnings of subsidiaries (26)
-------
Loss before undernoted $ (117)
Tax recovery 168
Restructuring costs(561)
Gain on sale of investment 63
-------
Net loss $ (447)
-------
-------------------------------------------------------------------------
Total assets, excluding
cash and cash
equivalents $3,612 1,139 511 797 750 $6,809
-------------------------------------------------------------------------
Capital investments $ 257 84 4 41 142 $ 528
-------------------------------------------------------------------------
DATASOURCE: Noranda Inc.
CONTACT: Denis Couture, Vice-President, Public Affairs & Communications,
(416) 982-7020; Steve Douglas, Executive Vice-President and Chief Financial
Officer, (416) 982-3554