K.P. sales trend in doubt

Press, 18 September 1976, Page 15

K.P. sales trend in doubt

iPA Dunedin I Tonnages of fertiliser soldi I by Kempthorne Prosser and! • Company, Ltd. increased in! •each of the three months to August 30, but the chairman (Mr P. W. Fels) indicated at the annual meeting, that a definite trend has yet to emerge. Tonnages sold in June showed an increase of 22 per cent, compared with the corresponding period of last • year. | In July a 112 per cent increase was registered, but estimates for August were only about 6 per cent ahead. These figures were inconclusive, and tonnages | sold in August could not possibly sustain the impetus shown in July, whatever the cause, Mr Fels said. “A clearer picture should emerge by half-way through the current year.” In the Budget on July 29, the government subsidy on fertiliser was reduced $10,79

la tonne, but the transport i subsidy was unchanged although extended to include I the transport of lime. • The fertiliser spreading subsidy was increased fort fertiliser spread by air. and decreased for other methods| of spreading. The immediate effect of these measures had been to increase the cost of each tonne of manufactured stock held by the company and this meant additional financing requirements, he said. “The bulk of the government savings from the reduced subsidy are to be; applied to two forms of in-j centive to farmers to in-j crease their livestock. “The first option is: (directed toward the developing farmer who is short of capital: the second option is directed to a farmer carrying stock below capacity, but reluctant to carry more because of a high marginal tax rate. “It seems likely that the influence of the new livestock incentives will not fall

t in the same farming sectors ■ as the fertiliser price subs sidies they replace, and we think that fertiliser use ; could be maintained or in- • ideed increased in marginal I • areas or on land which is ■ (less than first class. “However, in farming ’ areas already highly devel- > oped, the incentives will be i an adequate replacement for : the fertiliser subsidy,” Mr 1 Fels said. Referring to the latest accounts,. Mr Fels pointed ■ out that the adoption of ■ straight line depreciation in •jthe latest year had had the ■(effect of reducing group net ■(profit by $128,000. • This was only partly >'offset by non-trading income -j of $70,000 from the tempor- : ary.- investment of loan i monies received for Wanga- ■ nui acid plant. As previously announced, ’ the net profit for the year to • May 31 increased 54 per cent to SI.IM and dividend : has been maintained at a ■ steady 12 per cent for the year.