Peko saved from loss by tax credits

Press, 2 September 1981, Page 23

Peko saved from loss by tax credits

Big running-in costs at its Tennant Creek smelter and lower prices for copper crippled the trading result of I Peko-Wallsend, Ltd. in the I year to June 30. ' ' The net profit fell to ] sAust36M. compared with ■ $437M in the previous year. The dividend has been re- ! duced to 15c a share, com- ! pared with 22.5 c a share last year. I After a net profit of only ! $11.4M for the first-half, it i incurred a loss of S7.BM for i the final six months. Sales rose 14.9 per cent to $561.5M but there was a loss of $7,69M before tax.

s It was only after a tax j benefit of $11.3M that Peko i- made a group net profit. In f spite of the sharp fall. Peko's e chairman (Mr George Lean) was confident that the como pany had seen the last of its h problems, particularly at its -. Tennant Creek smelter. The smelter, which was ret commissioned last October after being dormant for sevv eral years, was the "main t cause" of the company's r problems. The company's recent deo cision to reduce the ore s production rate at Tennant Creek from 900.000 to 60,000

tonnes a year had brought the smelting operation "closer" to a break-even point on a cash basis, he said. The company said it was confident that it would make higher profits in 1981-82. The reasons for this confidence were the discovery of a number of large, low-grade copper-gold ore bodies in the Parkes area of New South Wales, the well-advanced plans for the production of coal from its Ellalong colliery. and stockpiling bismuth at Tennant Creek, hoping for an upturn in its price.