COMMERCIAL B.H.P. expects profit rise of 20 p.c.

Press, Volume CXV, Issue 33777, 25 February 1975, Page 14

COMMERCIAL B.H.P. expects profit rise of 20 p.c.

(N.Z. Press Association—Copyright) Broken Hill Proprietary Company, Ltd, expects a profit of about $lll million for the full year to May 31. Such a profit would be an increase of about 20 per cent on the profit for the latest year.

The company says that it expects that over-ail results for the second half of the year may not differ greatly from the $55.6 million firsthalf profit announced last week.

B.H.P. expects the steel and subsidiary section to face unfavourable conditions, but this should be offset by improved results from the petroleum and minerals section. B.H.P. says the group and industry generally face many problems — profit margins are being significantly reduced while at the same time the cost of investment in plant and equipment is rising. These trends follow from current inflationary pressures, and ptoduce conditions which discourage the private investment needed for economic growth, B.H.P. says. There is a need, therefore, for policy-makers to recognise that an excessively high rate of inflation is itself a major disincentive to investment.

The company notes recent Australian Government

moves to encourage investment but says a return to satisfactory levels of investment and employment without undue inflation will call for additional action.

B.H.P. — Australia’s largest company — is optimistic in the long term, however, and says the current problems should be kept in perspective.

“Taking a longer view, there are ample grounds for believing that given a favourable investment climate for private industry, the last quarter of this century should see economic growth

resumed on a scale greater than the remarkable rates of the quarter century just past,” the company says. The countries of Asia and the Pacific should share in this trend, with Austraia’s resources used to full advantage, and such a developing pattern of growth will offer B.H.P. opportunities of greater long-run significance than the present apparent setbacks, the company adds.