Commercial Rheem profit halved in first half

Press, 22 December 1978, Page 11

Commercial Rheem profit halved in first half

Rheem N'.Z Ltd, yesterdays announced that unaudited group net profit after taxation for the half year to i November 30 was §156,000i ($359,000 in the same period! last year) on sales of | $6,114,000 (§6,444,000). The directors say in their report that the less than buoyant condition of the economy generally is reflected in the over-all decline in the company’s sales al- i though in the circumstances! these have been reasonably ! well maintained. In particular unseasonall delays in the food industry ! resulted in the demand for! some major container lines I being below expectations during much of the past six! months. There has been a significant upturn in demand ,n recent weeks and substantial) orders are now being held. Production lines at both!

r < factories, Wellington and I Auckland, are currently operating at high levels. In the plastics division 1 sales which also were at . lower than budgetted levels for several months, have regained near expected volumes and a satisfactory level of business is anticipated in the months ahead. Exports of mains pressure) water heaters to recently! ) developed overseas markers ■ • have resulted in additional) production in the appliance! ; division and the benefit of j -the increased sales from this; activity are now commencing to accrue. Production of'l.p.g. (liquid ! petroleum gas) cylinders' ’commenced towards the end! of the period and the sales; 1 outlook for these products is I igood. The directors state that! 'profits were effected by con-i

I i siderable and non-repetitive ' developmental and pre-pro-duction expenses on new ; . product lines, both for local : ! and overseas markets, in- ; curred in the period under review. Revenues from these new r undertakings have only recently commenced to be) 'realised but did not contribute to the reported profit. ! i The directors draw attenJtion to the fact that on '■present outlook the results’ J for the first six months are; not indicative of the likely | outcome in the remainder of! ''the year. An improvement in sales. ;and profits which became: evident in recent weeks,' gives ground for optimism! j that if conditions do not unexpectedly deteriorate satisfactory results should be ; achieved in the remaining (six months, they say.