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Freeport-McMoran swings to US$292M profit in Q4'16

U.S. mining giant Freeport-McMoRan Inc. on Jan. 25 said it swung to a fourth-quarter 2016 net profit of US$292 million, or 21 U.S. cents per share, compared to a net loss of US$4.08 billion, or US$3.47 per share booked a year ago.

The NYSE-listed company's fourth-quarter 2015 results included a US$4.1 billion charge from the reduction in the carrying value of its oil and gas properties.

Revenue during the quarter rose to US$4.38 billion from US$3.52 billion a year ago, thanks to higher average realized prices for metals, with operating cash flows jumping to US$1.14 billion from US$612 million.

Consolidated copper production in the period rose to 1.20 billion pounds from 1.12 billion pounds produced in the prior year.

Sales for the red metal also improved to 1.19 billion pounds from 1.15 billion pounds, primarily reflecting higher volumes from Cerro Verde and PT Freeport Indonesia, partly offset by lower sales from North America primarily due to reduced mining rates and lower ore grades, and the impact of the Tenke Fungurume stake sale in November 2016.

The company's average realized price was US$2.47 per pound of copper in the final quarter of 2016, up from US$2.18 per pound in the prior year.

On a yearly basis, gold output rose to 430,000 ounces from 350,000 ounces, while gold sales jumped to 405,000 ounces from 338,000 ounces, thanks to higher ore grades at Freeport Indonesia, which operates the Grasberg copper-gold project in Indonesia.

Average realized gold prices hit US$1,174 per ounce, up from US$1,067 per ounce in the fourth quarter of 2015.

The company forecast lower unit net cash costs in 2017 as it expects higher ore grades at Grasberg. In 2017, the miner expects to sell 4.1 billion pounds of copper and 2.2 million ounces of gold.

CapEx totaled US$504 million during the quarter, down from US$1.29 billion in the prior year. For the full year, CapEx was US$2.81 billion, down significantly from US$6.35 billion during 2015.

At 2016-end, the company's cash and cash equivalents stood at US$4.25 billion, compared to US$177 million at the end of 2015, while total debt fell to US$16.03 billion from US$20.32 billion over the same period.

Freeport-McMoran's net loss for the year 2016 was US$4.15 billion, or US$3.16 per share, narrowing from US$12.24 billion, or US$11.31 per share, in 2015.

The year-ago loss included US$12.1 billion in charges stemming from the reduction in the carrying value of oil and gas properties.

Operating cash flow for 2017 is expected to total about US$4.3 billion. CapEx this year is forecast at about US$1.8 billion.