Inflation major worry of C.I.G.

Press, Volume CXV, Issue 33741, 14 January 1975, Page 16

Inflation major worry of C.I.G.

(Neto Zealand Press Association— Copyright) SYDNEY. The basic problem for Commonwealth Industrial Gases, Ltd, is the effect of inflation on its cost structure and development programmes, the chairman (Mr K. O. Humphreys) says in the annual report.

! ‘ln these uncertain times, it is much more difficult to make projections. “However, providing that there is no severe downturn in the economy, our budget indicates that last year’s profit level will be maintained,” Mr Humphreys says. He says that cost increases will continue to accelerate, and the effects of the current credit squeeze may also be reflected in re-

duced demand for the company’s products. Capital expenditure of about s2om is planned foi the year, to provide a supply of industrial gases and associated services to meet projected Australian demands. The funds will substantially be provided from new borrowings. Previously, the company’s internal cash flow had been the prime source of financing such expenditures. Unless Goverment policy is modified to permit the company to achieve the profit ratios earned prior to the advent of the Prices Justification Tribunal, the company will be forced to severely curtail its future capital programme, Mr Humphreys says.