Alcan improves sharply'

Press, 14 August 1976, Page 17

Alcan improves sharply'

NZPA Melbourne ) The group net profit of. j Alcan Australia, Ltd, rose a sharp 130 per cent to SI.9M in the six months to June 130, because of a rise in ( domestic aluminium demand I and higher selling prices, says the chairman (Mr J.. B. (Clarkson). ) The announcement of the i profit revival comes a week after U.S. aluminium producers sharply increased their j domestic and international 'prices. j This was partly in- reI sponse to a strike which has (crippled Alcan’s Canadian (parent by reducing its I operating rate to a bare 31 r per cent of smelting capact ity. r However, Alcan Austra--3 lia’s recovery owes nothing ; to its Canadian parent’s mis- :. fortunes, since all its output

is sold on the Australian' market. Its sales expanded 23.51 per cent to $38.8M, but were! paradoxically below thel $39.2M level in the six. months to December 30. |: when output volume was) down but price yields were! up. Alcan Australia's chairman, (Mr J. B. Clarkson) warns that the recovery in Austra-i lian demand has been uneven so far, and that growth i prospects are still difficult I to predict. He also points out that! the improved profit- result) represents a return on average shareholders’ funds of! only 9 per cent, “which does not even match the current! rate of inflation in Austra-i ilia.” j I Even so, Alcan of Canada ((which holds a 70 per cent (equity) and the 25 AustraI lian institutional share-

rolders (with the remaining 10 per cent) benefit margin-! illy from the profit recovery) .vith an increase from 2 per tent to 2.5 per cent in) nterim dividend. The latest profit gives an I annual earning rate of less] than 14 per cent, which still falls well short of the level; leeded to fulfill Alcan’s long-standing promise of; eventual Australian public' ?quit» participation. There were no extra-' ordinary items in the latest i half-year, leaving total net i profit at $1,942,000. In the! lune half of last year, extra-1 ordinary items of $28,000' lowered the net result to! >816,000 The profit was after pro-1 viding $404,000 more for tax: at SI.SM, $19,000 more fori depreciation at SI.BM, and) $30,000 more for interest) charges at SI.IM.