N.Z. Steel’s profit falls 45 per cent

Press, 4 November 1983, Page 8

N.Z. Steel’s profit falls 45 per cent

PA Wellington New Zealand Steel, Ltd, has announced a 42.5 per cent drop in profit during the six months ended September 30. It reports an unaudited net profit of $7,116,000 for the period, compared with $12,379,000 in the corresponding period last year. On Wednesday, Fletcher Challenge announced it had quit its 9.8 per cent shareholding in New Zealand Steel in off-market sales.

New Zealand Steel directors said yesterday that the profit was comparable with

that reported in the second half of the last financial year, and that the decline compared with the same period last year was mainly the result of lower activity in the domestic economy. The company reports sales of $135,571,000 ($143,018,000), and the net profit is reached after providing $137,000 ($4,069,000) for tax and $178,000 ($472,000) as retained profits of associated companies. Export tax benefits of SI.9M (SI.4M) were taken into account in the tax provision. Depreciation of $4.2M ($4.3M) has also been provided for in the net profit before tax of $7,075,000 ($15,976,000). Sales volumes of pipe products and galvanised products

to the domestic market were down about 40 per cent on the volumes recorded in the com-, parable period last year. Domestic billet sales dropped ■ ■ about 16 per cent. Other factors affecting the lower result . were the price freeze and interruption of billet production by building associated. with the development programme. Ironsand sales from Taharoa totalled 767,000 tonnes (816,000 tonnes). Although domestic orders for all the company’s products are somewhat higher for the - second half of the financial year than the first half, it is likely that the result for the second half will be in line with * that achieved in the first half of the year. The interim dividend is ’ limited to 3c per share by the freeze. It will be paid tax free.