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Thursday, January 25, 2018

=Freeport-McMoRan (FCX) reported earnings on Thur 25 Jan 2018 (BMO)

Freeport-McMoRan beats by $0.01, beats on revs; Operating Cash Flow higher than expected; Guides for FY18 operating cash flows, CapEx; Provides update on Indonesia 
  • Reports Q4 (Dec) earnings of $0.51 per share, excluding non-recurring items, $0.01 better than the Capital IQ Consensus of $0.50; revenues rose 15.2% year/year to $5.04 bln vs the $4.89 bln Capital IQ Consensus.
  • Average unit net cash costs for fourth-quarter 2017 were $1.04 per pound of copper and $1.20 per pound for the year 2017. Unit net cash costs are expected to average $0.97 per pound of copper for the year 2018.
  • Operating cash flows totaled $1.7 billion for fourth-quarter 2017 and $4.7 billion for the year 2017 (Guidance $4.3 bln). Operating cash flows for the year 2018 are expected to exceed $5.8 billion.
  • Capital expenditures for fourth-quarter 2017 totaled $390 million and $1.4 billion for the year 2017 (Guidance was $1.4 bln). Capital expenditures for the year 2018 are expected to approximate $2.1 billion.
  • At December 31, 2017, consolidated cash totaled $4.4 billion and consolidated debt totaled $13.1 billion. FCX had no borrowings and $3.5 billion available under its revolving credit facility at December 31, 2017.
Indonesia Update
  • FCX is engaged in discussions with Inalum and PT-FI's joint venture partner regarding potential arrangements that would result in the Inalum consortium acquiring interests that would meet the Indonesian government's 51 percent ownership objective in a manner satisfactory to all parties, and in a structure that would provide for continuity of FCX's management of PT-FI's operations and governance of the business. The parties continue to negotiate documentation on a comprehensive agreement for PT-FI's extended operations and to reach agreement on timing, process and governance matters relating to the divestment.
  • The parties have a mutual objective of completing negotiations and the required documentation during the first half of 2018.
  • In December 2017, the Indonesian government extended PT-FI's temporary IUPK to June 30, 2018, and PT-FI is seeking an extension of its export license which currently expires on February 16, 2018, to enable normal operations to continue during the negotiation period.
  • Until a definitive agreement is reached, PT-FI has reserved all rights under its Contract of Work (COW). Operating and Development Activities. PT-FI is currently mining the final phase of the Grasberg open pit, which contains high copper and gold ore grades. PT-FI expects to mine high-grade ore over the next several quarters prior to transitioning to the Grasberg Block Cave underground mine in the first half of 2019. 

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