Hamersley profit fell 40 per cent

Press, 27 January 1979, Page 18

Hamersley profit fell 40 per cent

NZPA Sydney Directors of Hamersley Holdings, Ltd, have cut the final dividend from 8c to 5c a share, after earnings in the year to December 31 felt S23M or 40 per cent to S34M.

The interim dividend was halfed to 4c a share. The result would have been far worse had the company not derived a net benefit totalling 517.3 M from rhe Federal Government’s investment allowance. The investment allowance stems from the completion of Hamersley’s new iron ore benefication plant. Tests on the plant, built at a cost of over SIOOM commenced in the final quarter.

i At the end of the third quarter Hamersley’s net earnings were running 72 per cent below those of the previous corresponding period but the investment allowance had not been taken into account.

Ore shipments in the final quarter ran at a very high rate, compared with those in the three preceding periods. Ore shipped for the year declined from 33.1 M tonnes to 31.2 M tonnes.

The level of shipments exceeded production of 29.4 M tonnes, indicating Hamersley ran down its stocks. Turnover for the year fell ifrom 5392.7 M to $359M and ■ pre-tax operating profit from l$lOB.lM to 547.1 M.

; Interest charges were (down from $26. IM to 1517.1 M. Depreciation and amortisation provision rose from ■ SSOM to $52.7M. ; The dividend of 9c for the year (16c previously) will 'absorb $21.8M which is easily covered by reported earnings.

Once again Hamersley's earnings were depressed by substantial provisions for future exchange losses. The provision for possible losses in 1978 was 516.3 M, compared with SIO,IM in 1977,