Terra Nostra Resources Corporation has announced results for the December 2007 to February 2008 quarter.
Revenues for December 2007 to February 2008 quarter were USD 108.8 million up by 163.4% YoY as compared to USD 41.3 million for December 2006 to February 2007 quarter. Gross profit reached USD 11.4 million up by 776.9% YoY as compared to a loss of USD 1.3 million. Blended gross profit margin in the quarter was 10.4%, reflecting strong management of raw materials sourcing in both of the copper and stainless steel operations, higher copper pricing and the addition of higher grade stainless steel.
Operating profit for December 2007 to February 2008 quarter was USD 7.9 million up by 71.7% YoY as compared to USD 4.6 million in December 2006 to February 2007 quarter. Comprehensive income was USD 39.3 million as compared to comprehensive loss of USD 3.3 million. Included in fiscal third quarter 2008 comprehensive income was non cash derivative income of USD 37.6 million related to the company's convertible note financings.
Mr Don Nicholson president & acting CFO of Terra Nostra said that "Third quarter's performance reflects the aggressive ramp in our stainless steel business, with production increasing to 22,260 tonnes from 1,495 tonnes in 2007. We made good progress executing on our growth strategy to become a premier producer of specialty stainless steel and cathode copper in China. Refurbishment of the Jinpeng copper facility, designed to bring the plant to international environmental standards, is now complete. On the stainless steel side we produced our initial run of higher value 310 S and increased value added downstream production of approximately 17,000 tonnes of hot rolled strip."
Mr Nicholson said that "In the fourth quarter we will continue to deploy the capital raised in the second half of 2007, increasing production and diversifying our product mix. Now that both the Jinpeng and Dongying copper facilities are fully operational, we will begin to ramp downstream production of rod and wire used in the power and home appliance sectors. Based on orders in hand we are planning for a continued ramp in stainless steel production, including a larger portion of higher grade 310 S and hot rolled strip. Domestic demand remains robust. Our local sources of supply and our modern, efficient and strategically located plants give us a distinct advantage over imports and other in-country producers. Our performance to date demonstrates that we've built an efficient manufacturing model to maximize profitability as we achieve greater economies of scale and optimize capacity utilization."
Terra Nostra is a leading copper and stainless steel producer in China through its 51% majority interests in two JV companies in China. Shandong Terra Nostra Jinpeng Metallurgical Co Limited has an existing and under construction total production capacity of 170,000 tonnes of electrolytic copper and 20,000 tonnes of low oxygen copper, together with value added copper rod and wire capabilities. Shandong Quanxin Stainless Steel Co Limited operates a modern stainless steel production facility with a 230,000 tonnes capacity casting mill and a 150,000 tonnes rolling mill. The two JV companies, with total assets in excess of USD 250 million and over 1,000 employees, are located in the highly industrialized coastal province of Shandong, midway between Beijing and Shanghai.
