This allowed Noranda to rank eighth among Canadian businesses in terms of sales and sixth in profits. However, some investors do not consider Noranda such a blue-chip prospect these days. The Bank of Canada's decision to fight inflation and rein in the runaway economy with higher interest rates hurts a company like Noranda with its acquisition-heavy debt load. A stronger Canadian dollar also trims the profit margins from sales to the United States, and nearly 60 percent of Noranda's products are sold to U.S. markets. Prices are currently depressed for aluminum and oil, as well as pulp, newsprint and other paper products.
Metal markets are weaker, competition is stronger, and ore grades are off.
Production problems and shutdowns have also hurt the bottom line. Results from the first quarter of 1990 show a continued erosion of profits across the board. At this spring's annual meeting, Noranda, Inc. Chairman Alfred Powis spent a lot of time explaining his company's murky financial picture. He blamed interest rates, currency exchanges and energy-supply problems. The Canadian government does not share Noranda's rosy assessment of the dioxin situation and last year closed off large areas of the British Columbia coastal sea bed to commercial fishing because of dioxin contamination.