Lower copper prices are due mainly to the slowdown in the Chinese economy. Chinese copper demand has been a key driver of the global copper industry.
Investors should track aspects of Freeport’s financials such as trends in operating profits. Freeport posted a loss of more than $3 billion in 4Q14.
Freeport’s major markets include North America, which contributes 45% of its revenues. Asia accounts for a fourth and Europe 11% of Freeport’s revenues.
Freeport gets more than half its revenues from copper and more than 10% from gold. It’s among the top three copper producers in the world.
Freeport has shelved its capital expenditure plans for its energy assets. All major energy producers have also cut capital expenditure targets for 2015.
Freeport’s North American operations include seven copper mines and reserves of 35.6 billion pounds of copper and 2.42 billion pounds of molybdenum.
Freeport’s global mining portfolio shows that Freeport has major operations in North America, South America, Africa, and Indonesia.
Freeport’s key historical timeline starts more than a century ago when Freeport Sulphur established the city of Freeport, Texas, near its sulphur mine.
Freeport-McMoRan (FCX) is a leading natural resources company. It’s among the top copper producers and holds the position of largest molybdenum producer.
There are certain risks specific to Century Aluminum (CENX). There are certain strategic priorities that Century Aluminum’s management needs to address.
Most aluminum companies closed the year with decent gains on the stock markets. Century Aluminum (CENX) delivered ~135% returns on Wall Street.
The valuation of any enterprise is a function of its growth opportunities and the risk associated with the business. Aluminum demand is expected to be higher in 2015.
Century Aluminum’s (CENX) working capital requirements were reduced in 4Q14. However, its working capital might come down more in 1Q15.
Century Aluminum had a capex of $56 million in 2014. It has a capex budget of ~$80 million for this year. Its maintenance capex is expected to be $20–$25 million.
For Century Aluminum’s fourth quarter cash flows, the biggest contributor was its earnings. Its adjusted EBITDA was $92 million in the fourth quarter.
Working capital management had a positive impact of $10 million on Century Aluminum’s (CENX) fourth quarter cash flows.
A shift to value-added products also helped enhance Century Aluminum’s profit margins. An increase in its profit margins is a positive sign for its investors.
For Century Aluminum’s (CENX) 2015 product mix, it expects to get more than half of its revenue from non-standard grade aluminum products.
Century Aluminum’s plants in Helguvik and Ravenswood are idled. It hasn’t been able to secure power supply contracts.
Century Aluminum (CENX) has a series of power supply agreements. At the Hawesville plant, Century Aluminum purchases electricity at market-based pricing.