July 23, 2020 / 12:27 PM / 16 days ago

UPDATE 4-Freeport-McMoRan swings to second-quarter profit after cost cuts

(Updates first sentence to focus on GAAP profit)

July 23 (Reuters) - Freeport McMoRan Inc on Thursday said it swung to a second-quarter profit as the world’s largest publicly traded copper producer slashed costs to stem the fallout from the coronavirus pandemic.

Shares fell about 1.3% to $13.44 in afternoon trading.

Net income attributable to shareholders was $53 million, or 3 cent per share, in the second quarter ended June 30, compared with a loss of $72 million, or 5 cents per share, a year earlier.

Only a handful of employees had gotten seriously sick from COVID-19, Chief Executive Richard Adkerson told investors on a Thursday conference call.

The Phoenix, Arizona-based company unveiled a $1.3-billion cost-cutting plan earlier this year, which involves employee layoffs and delays to expansion projects.

While copper prices have risen, Freeport does not plan to boost spending or make changes

“We’re not making any major adjustments to those plans until we have clarity in this market situation,” Adkerson said.

If prices do continue improve, Freeport may consider reinstating its dividend or share buybacks in 2021, he said.

The miner’s quarterly copper production fell 1.2% to 767 million pounds, while its gold output rose 19% to 191,000 ounces.

The average price that Freeport received for its copper fell 7% in the quarter, event though copper prices traded 22% higher in the same period.

Freeport’s total costs and expenses in the second quarter dropped 22% to $2.7 billion.

Freeport has been boosting production at its Grasberg copper and gold mine in Indonesia, which is expanding underground. The ramp-up of underground production at Grasberg continues to advance on schedule, the company said. (Reporting by Shradha Singh and Ernest Scheyder; Editing by Aditya Soni and Bernadette Baum)

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