Arcon posts return to profit
The Tony O’Reilly-controlled firm, which operates the Galmoy zinc mine in Co Kilkenny, turned around a loss of €9.7 million in 2003 to register profits of €1.4m last year. Earnings before EBITDA came in at €9m after a loss of €4.5m in 2003.
Revenues soared 67% to €37.3m on the back of a 26% rise in zinc prices. But the firm missed out on the full benefit of higher zinc prices thanks to the slide in value of the dollar, the currency in which zinc prices are denominated. The stronger euro meant revenues were worth less in euro terms.
Chief executive Peter Kidney said the results showed the company had made strong progress. It expected further increases in zinc prices between now and the end of 2006, which would be driven by a pick-up in demand and a shortage of zinc concentrate on world markets.
Arcon shareholders also heard yesterday the board had reached agreement with Canadian-headquartered mining company Lundin on a takeover approach and recommended acceptance of the deal to shareholders. The deal values Arcon at around €93m, or 54c per share. This compared with the 49c value attached to Arcon by the markets yesterday.
Lundin operations vice- president Karl-Axel Waplan said the offer was 30% higher than Arcon’s average price in the three months before the approach was made public earlier this month. But it was slightly lower than Arcon’s closing price the day before the deal was announced.
Shareholders will receive almost €27.65 in cash for every 100 Arcon shares they own, as well as 3.22 Lundin units, which are traded through the Swedish stock exchange in Stockholm.
Shareholders who own less than 1,000 Arcon shares, whose value would be less than €490, will have the option of taking all cash instead of the mixture of cash and equity.
The deal needs the agreement of 80% of shareholders, but Dr O’Reilly, whose interests own 65% of the firm, has already signalled his acceptance.
