Peko-Wallsend down 64 p.c.

Press, Volume CXV, Issue 33776, 24 February 1975, Page 19

Peko-Wallsend down 64 p.c.

(New Zealand Press Association—Copyright) SYDNEY. The unaudited group net profit of PekoWallsend, Lt<L fell 64 per cent from §4,059)338 to §2,353,647 in the six months to December 31, the directors say in the half-yearly report.

The reduced result was 'caused principally by losses associated with copper production, and the sharp decline in copper prices on world markets also had a severe impact on earnings during the half year, the directors say. Peko Wallsend was losing heavily on copper before last months' decision to close its smelter at Tennant Creek, and suspend copper ore production from its two largest mines in the area. The severity of the copper losses is shown by the) slump in the net trading ■profit in the face of an ! equally sharp gain of 64 per cent in the gross value of; ;mine products sold. Most of the profit decline was due to copper, but a large part of the sales in-i crease appears to be attrib-( utable to gold. The company is placing ) more reliance on gold to • I tide it over what appears to be a protracted period of ! depressed prices for copper. It is increasing output pf gold-bismuth ore from its Warrego mine at Tennant Creek from 60,000 to 100,000 i ' tonnes a year, and it has switched the exploration emphasis in the Tennant : Creek field from copper to Igold. Apart from copper, the group performed well during 7

the half year, the chairman (Mr J. S. Proud) says. Of the 64 per cent jump in gross value of mine products sold, 23 per cent results from a change in the structure of the company’s mineral sands operations previously repiesented through its half ownership of Rutile and Zircon Mines (Newcastle) Ltd. The report points out that i this is not an addition to the (group activities, but a rearrangement oi part of these activities as a direct participant in place of an investment. The report does not detail the average prices received for its various metals which, apart from copper and gold, include bisrmith, selenium and tungsti oxide. However, it indicates that (scheelite (tungsten ore), which was causing concern ‘this time last year, because )of depressed tungsten prices, ’has now improved. Peko-Wallsend took advantage of its $6.6m net profit for the December half of 1973, and wrote $2.5m off its investment in King Island scheelite. There is no such write-off this year. The hal'-yearly report covers the results of the’ mining division for the 24) weeks to December 24, and; results of other divisions for full half-year to December) ‘3l.