ROBE RIVER MAKES FIRST PROFIT

Press, Volume CXV, Issue 33959, 27 September 1975, Page 19

ROBE RIVER MAKES FIRST PROFIT

(Xew Zealand Press Associalion^-Copyright)

SYDNEY

Robe River. Ltd, the’3s per cent Australian partner in the Robe River iron ore project in the Pilbarra, earned its first group net profit of SAL Im in the rear to June 30.

However, the profit, oni which no tax is payable, is: barely half of the pre-tax annual profits of about sBm

(from 1975 onwards, which was forecast in the July! 1970 prospectus. Dollar revaluations, soarling costs, and smaller pellet! exports upset the prospectus, forecasts even though contract prices were re-nego-i tiated. The revaluation effect was tempered by the dollar devaluation of a year ago,| and prepared sinter fines; exports were better than scheduled. The prospectus had predicted that the 1975 export rate would be at least 6.1 m ■ tons of prepared sinter fines, 'and 4.2 m tons of pellets. Actual exports in the year to 1 June 30 were about 7.7 m tons of prepared sinter fines and 3.6 m tons of pellets. Sales increased 52.9 per cent to $32.4m. The latest profit gives an, learning rate of 10.1 pe.r cent j on capital. As announced Robe River.; is unlikely to pay a dividend for at least another two years, and will not be free Ito adopt an unrestricted dividend policy before the end of 1978. The company agreed with • its lenders that no dividend payments would be made ; until total loans were reduced by slsm. and that I payments would be re- ' stricted until total loans were reduced to $27.5m. Robe River should have a cash injection of about slsm by January, 1977. when B.H.P makes its payment for half the railroad and ‘port facilities owned by the 'Rober River project to develop B.H.P.’s Deepdale iron ore deposits. The result was after providing $179,501 more for ‘depreciation at s4.Bm, amor--1 tisation of expenditure (carried forward of $236,136 ‘ (unchanged), debenture inter-

pest of $5.9m (up $720,392) ■land a $45,851 (up $33,944) loss on the sale of fixed .assets. The profit means that last ;j year’s debit carry-forward of ■! s3.Bm has been converted to •a credit of $298,244. . I Test unsuccessjul I Production tests at the R e p u b J i c Petroleum Company Ltd’s No. 1 well have indicated that crude oil t obtained from the lowest zone, perforated at 2850 ft, is not present in sufficient. | quantities for the zone to be' ' considered commercial. Republic said perforation and production tests of fur-; . ther prospective “pay zones”; in the well will follow.