Alliance Freezing costs increasing rapidly

Press, 16 February 1978, Page 16

Alliance Freezing costs increasing rapidly

PA Invercargill There had been a marked decrease in the profitability of Alliance Freezing Company, Ltd, before deducting depreciation, the chairman (Mr W. D. McKenzie) says in his report on the year to September 30. “Rapidly increasing costs, which are not fully recovered in processing charges continue to erode the company’s profits. “The annual coal and

power charges amounted to $860,000, an increase of 75 per cent on the previous year, even though the usage per lamb equivalent had not substantially increased. “The company’s total annual payroll now amounts to more than SUM, and the cost of replacement parts is escalating at a rate higher than the average increas in inflation,” he says. Income from ancillary projects of convenience

foods, and beef powder exports made a major contribution to profitability, and export tax incentives reduced taxation by a significant amount. Profits from trading in schedule stock, while not as good as the previous year, together with profits from the ancilalry projects, contributed more than half of the company’s net profit. . The group’s net profit for the year to September 30 rose 41.5 per cent to $906,619, after providing $997,719 for depreciation and $580,676 for taxation. The directors have recommended a dividend of 12 per cent requiring $405,000, payable on March 3 to shareholders on February 16. Net current assets fell $787,964 to $2.9M, and the current ratio fell from 2.5 to 1.8 to 1.

Long-term liabilities, including a secured debenture to the New Zealand meat producers board of $6,300,000, were reduced $653,400 to $6,900,000. Shareholders’ funds rose $503,120 to $8,822,746. Fixed assets, at cost, increased $637,786 to $12,653,684. The company killed 1,509,518 lambs, 362,840 sheep, and 58,016 cattle in the year under review.