I.H. sales record $34M

Press, 11 December 1976, Page 17

I.H. sales record $34M

International Harvester New Zealand, Ltd, increased net sales by 6.3 per cent to a record S34M in the year to October 31, a record for the ninth successive year. The main improvement in sales was in agricultural equipment, and particularly farm tractors. Reduced Government, local body and private sector spending, reduced sales volume in the construction equipment.

New products available from I.H. suppliers in the United States, Great Britain, Germany, and France are currently being reviewed. Sales of trucks remained steady. The group’s net income rose 12.6 per cent to $787,548, but “it was a disappointing result,” the chairman (Mr A. J. Dewar) says in the annual report.

“A major contributing factor was the continued deterioration in the value of the New Zealand dollar against the United States dollar. “This seriously affected net income of International Harvester Credit Company New Zealand, the wholly owned finance subsidiary of International Harvester New Zealand.”

The trading of the credit company was $293,000, but an unrealised loss of $243,000 on a United States dollar loan reduced net income to $49,775.

“Other contributing factors were the inequitable import deposit regulations, increasing finance costs which, by law, are not recoverable. “Restrictive gross margins under the Price Stabilisation Regulations continue to limit the ability to improve operating income necessary for

future company growth,” Mr Dewar said. “With the buoyancy of export prices for primary products, prospects for the company’s sales of agricultural equipment, trucks, parts and service are excellent and the company was confident of a successful year,” the report says. The profit was after providing $52,584 more of $672,939 for tax, but $4296 at $181,697 for depreciation. Interest expenses of SI.4M were $286,787 higher. Net income per share rose from 222 c in 1975 to 250 c. A dividend of 95c a share has been paid to the parent company, requiring $299,250. Income retained for the year of $488,298, increased retensions to $4.9M.

Ordinary capital was unchanged at $6.3M in $2O shares.