Another call for $Aust devaluation

Press, 9 February 1982, Page 20

Another call for $Aust devaluation

PA Melbourne The directors of Associated Pulp and Paper Mills, Ltd, called for a sharp devaluation of the Australian dollar when announcing a 68 per cent drop in profit for the group in the half year to December 31. Group profits slid to $4.3M from $13.3M, with the directors blaming severe industrial problems, wage increases, rising imports, and the buoyant Australian dollar. Imports were “assisted by the artificially-high value of the Australian dollar, resulting in a reduction ip our share of the somewhat depressed Australian market,” they said. “Recent gradual movements downward in our exchange rate have been encouraging, but a more marked and substantial devaluation is necessary to restore the competitiveness of Australian manufacturers, in both domestic and export markets,” they said. A spokesman said that a paper industry strike during the period was one of the worst, industrial disputes ever faced by the company. Plant closures during the industrial campaign led ' to production losses of more than 50,000 tonnes but some

throughput would be recovered in the second half.

A high level of stocks allowed many orders to be fulfilled and sales for the six months were down only three per cent, to $179.2M from $184.6M. However, stocks are now at low levels.

The spokesman said that APM’s share of the SouthEast Asian pulp and paper market was being eroded because of dumping by Asian manufacturers.

The level of activity in the forestry and timber division was reduced as was the demand for woodchips. The directors are not optimistic about the results for the full year and APM is expected to fall well short of record production and profit figures achieved in 1980-81.

“A better result can be expected for the second half of the financial year, but this will not compensate for the

reduced profits in the first half.

“The extent of the improvement will depend largely on avoidance of industrial disruptions and upon some uplift in demand,” they said.

The directors have lowered the interim dividend to 6c a share, from 9c a share. It will be paid on April 22 to shareholders on the books by March 24.

Investment income rose slightly during the half to SI.9M (SI.BM previously) and income tax on the reduced profit dropped to $2.9M from $12.6M.

Payments to minority interests were $131,000 ($149,000) and depreciation was $8.07M ($6.55M): Interest charges were contained in the period to $3.65M (53.71 M

The earning rate slumped to 7.2 c a share from 22c a share.