We’re growing and profitable, and are in a very strong financial position.
Growth
We have been growing steadily since 2000. With our acquisition of Las Cruces in 2005 and increased production at Çayeli, we expect a 50 percent increase in copper production by 2010. If we proceed with the Cobre Panamá project, production could nearly double by 2014.
Long-term value
We measure value creation by the performance of our share price over the long term relative to our peers. Our share performance in 2008 was volatile, but in line with our peers. Our share price dropped a total of 76 percent from the start to the end of 2008. The metals and mining index dropped 69 percent over the same period. Despite a difficult year, we still outperformed our peer group by a cumulative 7 percent for the five-year period ending December 31, 2008.
Financial strength
Our financial objective is to ensure we have the cash and debt capacity to support our strategy to grow responsibly as a base metal mining company, providing superior returns to shareholders.
Our strategy is to ensure that we have sufficient liquidity in the form of cash and committed credit facilities to finance our operating requirements and the growth projects we have identified. We manage our debt levels by ensuring that, even at the low point in the metal price cycle, our operations can provide adequate debt coverage.
Key financial measures
We use the following key financial measures to assess our financial condition and liquidity:
|
as at
December 31, 2009 |
as at
December 31, 2008 |
| Current Ratio |
4.2 to 1 |
2.4 to 1 |
| Long-term debt to total capitalization |
1% |
19% |
| Net working captial balance (millions) |
$609 |
$475 |
| Cash balance (millions) |
$534 |
$573 |
Highlights
The table below shows our financial and operating highlights for the three months and year ended December 31, 2009.
| Key Financial Data |
three months ended
December 31 |
year ended
December 31 |
|
2009 |
2008 |
change |
2009 |
2008 |
change |
FINANCIAL HIGHLIGHTS
(thousands, except per share amounts) |
| Sales |
|
|
|
|
| Gross sales |
$290,570 |
$139,626 |
+108% |
$983,885 |
$944,865 |
+ 4% |
| |
| Net income |
|
Net income |
$89,763 |
$(32,514) |
+ 376% |
$269,169 |
$216,922 |
+ 24% |
| Net income per share |
$1.60 |
$(0.67) |
+ 339% |
$5.14 |
$4.49 |
+ 14% |
| |
| Cash flow |
| Cash flow provided by operating activities |
$125,781 |
$30,992 |
+ 306% |
$322,751 |
$324,505 |
- 1% |
| Cash flow provided by operation activities per share (1) |
$2.24 |
$0.64 |
+ 250% |
$6.17 |
$6.72 |
- 8% |
| |
| Capital spending |
$63,353 |
$133,979 |
- 53% |
$268,264 |
$460,792 |
- 42% |
| |
| OPERATING HIGHLIGHTS |
| Production (2) |
| Copper (tonnes) |
24,300 |
21,100 |
+ 15% |
83,600 |
80,500 |
+ 4% |
| Zinc (tonnes) |
23,500 |
19,600 |
+ 20% |
78,000 |
75,400 |
+ 3% |
| Gold (ounces) |
50,800 |
64,600 |
- 21% |
228,400 |
244,100 |
- 6% |
| Pyrite (tonnes) |
60,900 |
81,700 |
- 25% |
383,900 |
565,000 |
- 32% |
| |
| Cash costs |
| Copper (US $ per pound) (3) |
$0.22 |
$0.50 |
- 56% |
$0.44 |
$0.52 |
- 15% |
| Gold (US $ per ounce) (3) |
$202 |
$460 |
- 56% |
$182 |
$417 |
- 56% |
(1) Calculated as cash flow provided by operating activities divided by average shares outstanding for the respective period.
(2) Inmet's share.
(3) Cash cost per pound of copper and cash cost per ounce of gold are non-GAAP measures - see Inmet's fourth quarter report for the three months and year ended December 31, 2009. |
The table below shows our financial and operating highlights for each of the last three years.
Financial Highlights
|
2009 |
2008 |
2007 |
change (2008
to 2009) |
| (millions, except per share amounts) |
| Sales |
| Gross sales |
$984 |
$945 |
$1,104 |
+ 4% |
| |
| Net income |
| Net income |
$269 |
$217 |
$418 |
+ 24% |
| Net income per share |
$5.14 |
$4.49 |
$8.65 |
+ 14% |
| |
| Cash flow |
| Cash flow provided by operating activities |
$323 |
$325 |
$427 |
- 1% |
| Cash flow provided by operation activities per share (1) |
$6.17 |
$6.72 |
$8.85 |
- 8% |
| |
| Financial Condition |
Dec 31
2009 |
Dec 31
2008 |
Dec 31
2007 |
Change (2008
to 2009) |
| Current ratio |
4.2 to 1 |
2.4 to 1 |
5.6 to 1 |
+ 75% |
| Gross debt to total equity |
1% |
19% |
13% |
- 18% |
| Net working capital balance (millions) |
$609 |
$475 |
$855 |
+ 28% |
| Cash balance (millions) |
$534 |
$573 |
$841 |
- 7% |
| Shareholders' equity (millions) |
$2,238 |
$1,868 |
$1,392 |
+ 20% |
| |
| Operating Highlights |
2009 |
2008 |
2007 |
Change
(2008 to 2009) |
| Production (2) |
| Copper (tonnes) |
83,600 |
80,500 |
79,300 |
+ 4% |
| Zine (tonnes) |
78,000 |
75,400 |
85,100 |
+ 3% |
| Gold (ounces) |
228,400 |
244,100 |
223,300 |
- 6% |
|
| Cash Costs (3) |
| Copper (US $ per pound) |
$0.44 |
$0.52 |
$0.20 |
- 15% |
| Gold (US $ per ounce) |
$182 |
$417 |
$421 |
- 56% |
(1) Cash flow provided by operating activities divided by average shares outstanding for the period.
(2) Inmet’s share.
(3) Cash cost per pound of copper and cash cost per ounce of gold are non-GAAP measures – see Inmet's fourth quarter report for the three months and year ended December 31, 2009. |
Gross sales
Çayeli
In 2008, 66 percent of Çayeli’s revenue was from copper and 34 percent was from zinc.
Pyhäsalmi
In 2008, 43 percent of Pyhäsalmi’s revenue was from copper, 23 percent was from zinc and 34 percent was from pyrite.
Troilus
In 2008, 78 percent of Troilus’s revenue was from gold and 22 percent was from copper.
Ok Tedi
In 2008, 70 percent of Ok Tedi’s revenue was from copper and 30 percent was from gold.