COMMERCIAL Union Steam Ship Loss £350,868

Press, Volume CVI, Issue 31278, 26 January 1967, Page 15

COMMERCIAL Union Steam Ship Loss £350,868

(New Zealand Press Association) WELLINGTON, January 25. A year of developing frustrations, rising costs, poor turn* round and an attempt to help exporters by holding freight rates had “exploded” into a loss for the year of £350,868, the chairman of the Union Steam Ship Company of New Zealand (Mr F. K. MacFarlane) said at the annual meeting today.

In the previous year the company’s profit was £243,694. Since 1961, profits have failed to cover ordinary dividends ranging from 8 per cent to 3 per cent in the latest year, requiring £lBO,OOO.

Only the cumulative preference shares are listed. The dividend charge of 5| per cent required £55,000 this year.

Labour costs in all sections of the industry have increased considerably, and as the industry is one in which the labour cost component is I more than 55 per cent of total I operating expenditure, lack Of improved productivity i makes it essential that reveI nue be substantially increased I to service the capital erai ployed in the business, said 'Mr MacFarlane. : “To this end, freight rate increases are being applied and, unpalatable as they may be to users of the company’s services, it is just as essential that shipping services should operate at a profit as it is that exporters and importers, manufacturers and producers should. “The tax paid profit of 0.307

per cent on shareholders’ funds for the last five years clearly show that the company has, for too long in effect, been subsidising the Importers and exporters of cargoes.

This cannot be the continuing role of the shipping company.”

In his annual report Mr MacFarlane says that vessels operating solely on the New Zealand coast have shown a substantial operating deficit and highlight the burden carried by coastal vessels in operating through ports on the 10-hour day. The Wellington to Lyttelton ferries, Wahine and Maori, are now operating with success. New Vessel A roll-on-, roll-off cargo vessel, Hawea, is being constructed in Hong Kong for service between Auckland, Lyttelton and Dunedin, and should be operating by September.

Final plans are being examined before calling tenders for two roll-on, roll-off cargo ships for the trans-Tasman trade. The accounts show shareholders’ funds at £17,477,171, and include steady ordinary capital of £6 million and preference capitl of £im.