COASTAL SHIPPING.

Auckland Star, Volume LXIII, Issue 124, 27 May 1932, Page 3

COASTAL SHIPPING.

NORTHERN STEAMSHIP CO. CHAIRMAN'S ANNUAL REVIEW DIVIDEND OF FIVE PER CENT. "We believe that the present genera) depression will pass, and that the service of the company's fleet will again be fully utilised on a more payable basis. Indeed, we think there are already evidences of improvement." This statement was made by Mr. Charles Rhodes, chairman of directors of the Northern Steamship Company, Ltd., in moving the adoption of the report and balancesheet at the annual meeting of shaveholders, held to-day. In reviewing the report and balancesheet, details of which were published in the "Star" on Saturday, Mr. Rhodes said that the capital remained as last year, with no apparent impending liability to make any demand upon shareholders for any portion of the uncalled capital. Reference was made to that because the market price of the contributing shares with call liability had been, it was thought by the directors, unnecessarily low. It would be seen that the company had substantial insurance reserve accounts. The first had be<m established many years ago, when the company seriously ran passenger steamers and carried its own maritime risk. The company now bought insurance cover against the loss of vessels, while their average size and individual value was far less than previously. The reserve of £51,338 was therefore no longer necessary, and might quite well be merged with the company's No. 2 account, standing at £10,073, which had been established as provision for &ny workers' compensation claims. Each of those reserve balances was somewhat less than last year, but the directors felt the total to be so very substantially beyonds the needs that the reduction of £2400 for the year was fully justified. "No Liability at AH." "We show this year a liability of £23,500, being deposits of our subsidiary companies, and I need hardly say that, in a debt sense, it is no liability at all," said Mr. Rhodes.

The company's overdraft of £28,131 explained itself. It was at a perfectly comfortable figure when it was noted that the company had a total of £31f),000 in assets, which it regarded as the bank's security.. Concerning the item of £100,390 for fleet and accessories, £4034 had this year been provided for depreciation. That sum did not equal the recognised six per cent of prudence, but as mentioned last year, a conservative revaluation of the company's vessels, premises and stock, revised again this year, showed that the book value was fully represented, in spite of tho fact that some steamers laid up in. Shoal Bay were now definitely unsuitable for the company's purely cargo trades and therefore much reduced in value. Coal and stores on hand were conservatively estimated and provision had been made for bad debts, some, of which no trading concern could now escape. Profit and Loss. Touching on the balance of tho company's profit and loss account, £98SG, Mr. Rhodes said a. dividend of five per cent represented £8070, which left only £ISIG to carry forward. However, the directors felt that for some shareholders anything less than five pere cent would bo a serious deprivation, and although earnings were only four per cent this year they recommended a five per cent, dividend.

Tho directors believed that there were already evidences of improvement in the depression. Some proof of that was found in tho company's figures for the past six months, which were distinctly hotter than for the first six months, at tho end of which period tho directors had not felt warranted in declaring the usual interim dividend.. It was not desired, however, to convey any wrong impression that local cargo carried during the past 12 months was greater, for, as a matter of fact, it was over 31,000 tons less than for the year ending March, 1931. That shortage of tonnage was vital. It showed the straits of the country and was general throughout ail tho ports to which the company traded, and could not be ascribed merely to competition. Tho company's partially! filled vessels could have carried those! absent 31,000 tons at the mere cost of loading and discharging the cargo with! such an effect upon the company's' earnings that an 8 per cent dividend would have been easily assured. As it was the results the company had obtained had been secured only by drastic economies and a devotion to the service of the company by the staff that was highly commendable. A Reassuring Feature.

"One reassuring feature in our statistics is the increased quantity of butter and wool which has this year been carried, though, per contra, the kauri gum and flax trades have been dead, maize fell off seriously and cement freight decreased by 4000 tons," said Mr. Rhodes. "I need hardly say that all these disabilities have resulted in constant demands for reduction in freights, which we have felt it our duty to meet with sympathy wherever possible. We believe we have established a general goodwill and it is certain that, particularly in the carriage of fertilisers, we have often served districts without regard to profit. In this direction it is interesting to note that whilst the railway carries fertilisers at a non-paying rate the loss is made good by an annual grant from the Agricultural Department, which this year is estimated to be in the vicinity of £140,000. We failed in an effort to get the Government to extend this subsidy to companies helping the primary producers in the same way." During the year the company had carried some 58,784 passengers, a decrease of 7033 over the previous year's figures. The number of excursionists, 19,308, was about tlic same.

In conclusion, Mr. Rhodes referred to the death of one of Vie company's oldest directors, Mr. N. A. ISVithan. Mr. Nathan had been a member of the board for 2.5 years, and his opinion and advice had been of much value. Mr. E. W. Evans had been invited to fill the vacancy. Mr. Rhodes also made reference to the accidental death of the company's head sailworker, who fell from the sail loft to the street.

• Messrs. E. H. Davis, C. Rhodes and A. B. Roberton, the retiring directors, were re-elected, and Mr. G. O'Halloran was reappointed auditor.