Summary
Freeport-McMoRan Inc. (FCX) reported its second-quarter and six-month results for 2016, highlighting a net loss attributable to common stock of $479 million ($0.38 per share) for the quarter and $4.7 billion ($3.70 per share) for the six months. The company is actively pursuing debt reduction initiatives, having announced over $4 billion in transactions to date and receiving $1.4 billion in cash. A significant development is the planned at-the-market offering of up to $1.5 billion in common stock, with proceeds intended for debt retirement. Operationally, copper sales volumes increased in the second quarter of 2016 compared to the prior year, driven by higher volumes from Cerro Verde, although gold and molybdenum sales decreased. The company provided updated sales volume expectations for the full year 2016. FCX also reported progress on asset sales, including the sale of an additional 13% interest in Morenci and an agreement to sell its interest in Tenke Fungurume. The company's financial position shows consolidated debt of $19.3 billion and cash of $352 million as of June 30, 2016.
Key Highlights
- 1Net loss attributable to common stock of $479 million ($0.38 per share) for Q2 2016, and $4.7 billion ($3.70 per share) for the six months ended June 30, 2016.
- 2Company plans to launch an at-the-market offering to raise up to $1.5 billion to reduce outstanding indebtedness.
- 3Total debt stood at $19.3 billion and cash at $352 million as of June 30, 2016.
- 4Significant asset sales are underway, including the expected close of the Tenke Fungurume transaction in Q4 2016 and completed sales totaling $1.3 billion in Q2 2016.
- 5Consolidated copper sales volumes increased to 1.1 billion pounds in Q2 2016 from 964 million pounds in Q2 2015, largely due to higher volumes from Cerro Verde.
- 6Unit net cash costs for mining operations improved to $1.33 per pound of copper in Q2 2016, down from $1.50 in Q2 2015, reflecting higher volumes and cost reduction efforts.
- 7The company is actively restructuring its oil and gas business to align capital allocation with debt reduction initiatives.