C.R.A. still expects lower profit

Press, 8 April 1978, Page 17

C.R.A. still expects lower profit

(NZPA Melbourne Conzinc Riotinto of 1 Australia. Ltd. has made anI other prediction that its i learnings this year were un-i I likely to match the profit of sAust"7.9M in the year to i December 31. i In its annual report, : C.R.A.’s chairman and chief ( (executive (Mr R. H. : ’Carnegie), said that 1978; i trading results would be sub-! j stantially lower than those ( (of 1977'unless there was a ; significant upturn in the ; economy, and an increase in’ metal prices. A clear picture of salesi ■and earnings was difficult to; (obtain, because of currency I instability and weakening l I metal demand and prices, he said, but he predicted that; I mineral production cutbacks. ’ were likely to be more severe ; 1 in 1978 than in 1977. ■ The report disclosed that iC.R.A has now written off: jail of its $9.4M equity in-

vestment in Mary Kathleen Uranium, Ltd. The group made a 55.4 M provision against the investment in the latest accounts after providing S4M in the previous year. MKU, which incurred a 510.9 M loss in 1977, is expected to have “a further though much smaller” loss for 1978. The report also said that the fluctuation dn the price of zinc since December 31 might cause the stocks held by the A.M. and S. group to realise less than book-value. At the date of the annual report (on March 7), the London Metal Exchange price of zinc was 10 per cent below the December 31 level. Since then, however, it has recovered 24 per cent, and now stands above the European producer price of SUSSSO a tonne. However, Mr Carnegie pointed out at a press conference that A.M. and S.

i zinc sales were based on the ; (producer price, which was' ■cut from SUS6OO on February' 20. ’ The depressed zinc f ’markets caused A.M. and S.. and its equal Dutch partner,; Billiton, to defer “significant”’ expenditure on increasing l production from the jointly-; ’owned zinc complex at: ’ Budel, in the Netherlands. C.R.A. has steped-up its; (diamond exploration in the) Kimberleys area t>f Western' Australia during 1977, and’ ’ increased its interest in the ; Ashton joint-exploration ven- ’ rare from 35 per cent to 52.7 ■ per cent. ’ Preliminary testing has indicated that some of the pro-’ ( spects are diamond-bearing, ’ but no grade or quality I estimates can be made at this ' stage. Bulk sampling and process- ’ ing will begin this year to (determine whether diamonds ’are present in commercial quantities, the report said.