Waitaki NZR profit for year $20.4 million

Press, 10 December 1983, Page 26

Waitaki NZR profit for year $20.4 million

Waitaki N.Z. Refrigerating, Ltd, reports an unaudited group net profit for the year to October 1 of |20.4 million. This is after providing for minority interests and includes extraordinary items totalling $2,929 million. Last year, the group reported an after-tax profit of $13,563M, including extraordinary items of $982,000. The chairman, Mr E. J. Neilson, says the two years are not readily comparable because: ® During the 1983 year the group sold its interest in F. J. Walker, Ltd, of Australia, which last year had incurred a loss, for equity accounting purposes, of $2.789M. © For the current year the group has extended its equity accounting to include all associated companies in which an equity of 20 per cent or more is held. In previous years the company accounted only for certain selected associated companies. The additional equity contribution for 1983 is $222,000. @ The directors reviewed the accounting policy on deferred tax and have agreed to maintain the amount of $10.508M provided in last year’s accounts as being adequate for the foreseeable future. Taxation provision for the year to October 1 is $3.7M ($6.9M). Mr Neilson, the chairman, says the difference relates to the variation in accounting policies on deferred tax (the effect of which is about $2.4M) and the various allowances in respect of the company’s new plants at Wairoa and Marlborough. He says the group has had the benefit of other incentives associated with the expanded exports

of further processed lamb products in which Waitaki is now a market leader.

During the 1983 financial year the company sold its interests in the Tasman shipping operations of Maritime Carriers N.Z., Ltd, to the Union Steamship Com-

pany. It also disposed of its acquisition in Southland Frozen Meat, Ltd, of almost 25 per cent of the total share holding in that company, when it became apparent that the Examiner of Commercial Practices would not approve of a holding above that level, Mr Neilson said. A record kill of almost 9.9 million sheep and lambs had been achieved during the year, in spite of the 14-week strike at Islington. The total production of sheep and lambs- for the season had been taken over by the N.Z. Meat Board in accordance with its current policy. Large quantities of lamb from the 1981/82 season owned by the company still remained on hand at October 4, 1982, and although this had been revalued realistically fur-

ther trading losses were encountered in the 1983 year.

Mr Neilson said that during October a new mutton slaughterhouse complex at Wairoa and a completely new lamb and mutton processing plant at Marl-

borough were officially opened. The works at Picton ceased operations at the conclusion of the 1982-83 killing season. Both new plants incorporated the latest technological developments. The company had concentrated upon improving productivity by the introduction of this technology with the objective of containing processing costs.

“The construction of these facilities has involved an outlay of capital expenditure of $6B million. The company can now look forward to a level of capital investment over the next few years which will enable it to concentrate more particularly on product and market development.”

Mr Neilson said that the company had foreseen the need to present New Zealand lamb in consumer cuts

packaged in an attractive manner readily saleable in supermarkets overseas. This strategy had been rewarded by substantial increases in sales volume. Waitaki would continue to buy from the Meat Board substantial quantities of lamb for further processing into packaged cuts. More extensive representation has been established in the Middle East and an office in Singapore would be opened in January to service the markets of South East Asia. Commenting on the recommendations of the Meat Industry Task Force investigations, Mr Neilson said he hoped that the new marketing regime would bring the desired benefits for New Zealand even though improved marketing in itself will not solve all the problems of the total meat industry and the world surpluses of agricultural products. Waitaki NZR would co-operate to the utmost with the Meat Board to provide for New Zealand the best possible return in exporting lamb and mutton. The directors recommend a final dividend of 11c a share payable on March 2. When added to the interim dividend paid this will make a total steady dividend rate of 21c a share, the maximum allowable. (Last year it was also 21 cents per share.) Of the final dividend 9c a share will be taxfree. Shareholders who converted their convertible specified preference shares to new “ordinary” shares on October 2, received a preference dividend on October 1, and therefore are not entitled to the final ordinary dividend payable on March 2.

Earnings by Waitaki N.Z. Refrigerating, Ltd, from processing, trading, manufacturing, and ancilliary operations including income from investments: Year to Oct 1 Year to Oct 1 1983 1982 $ 5 After tax 17,644,000 15,169,000 Minority interest 22,000 128,000 Group income 17,622,000 15,297,000 Share of profits and losses of associated companies 191,000 2,716,000 Extraordinary items 2,929,000 . 982,000 Total income after tax 20,742,000 13,563,000 Provision for tax 3,705,000 6,958,000 Depreciation provided in the group accounts totals $11,330,000 (previous year $8,417,000).