W.M.C. cuts dividend again; sees revival

Press, 16 September 1976, Page 22

W.M.C. cuts dividend again; sees revival

NZPA Melbourne Western Mining Corporation, Ltd, has softened the blow of a further cut in its annual dividend with the news that its nickel prices would be raised 9.6 per cent on October 1, and a forecast that world nickel demand would pick-up in the first half of next year. The dividend for the year to June 30 has been reduced from 13 per cent to 10 per cent (5c a share) after a rally in the second half-year still left group net operating profit 12,3 per cent lower at $Au5t12,544,000.

The dividend rate was'cut from 16 per cent to 13 per cent in 1974-75 after a 9.6 per cent profit fall. The higher nickel price,! which follows increases byj

the two Canadian producers, Inco and Falconbridge, adds about S4M to the value of W.M.C.’s nickel stocks, which showed a large increase from $19.1M to $45.8M during the year. This stockpile, which is about two and a half times the level regarded as normal by W.M.C., increased the company’s interest bill from •SB.OM to $14.2M.

The company had problems with its regular nickel customers in the. past year, but it had benefited from substantial spot sales of nickel matte, the chairman (Mr A. Parbo) said. Sales of nickel in all forms rose two per cent to 39,400 tonnes, and sales in-1 come increased 21.4 per cent! Ito SIS9M.

Total output of nickel increased 2.0 per cent from 43,767 tonnes to 44,630 tonnes.

Net profit for the first half-year dropped 28.5 per cent to S7.OM, but net earning for the last half-year recovered 22.8 per cent from the depressed 1975 level to $5.5M.

The profit for the year was after deducting abnormal items of S2.IM, made up of an exchange loss of $1,499,000 and $623,000 of (gold ore stocks by a subsidiary company. I In’ the previous year, abnormal items resulted in a, profit of $866,000.

The depreciation provision [increased S6M to $24.6M, but the tax provision was reduced S2.IM to $7.9M.