NZ Steel 1:5 bonus after profit drop

Press, 1 June 1984, Page 17

NZ Steel 1:5 bonus after profit drop

PA Wellington New Zealand’ Steel, Ltd, dropped profit after a low level of activity in the first half of the year, the company said in its annual results announced yesterday. It showed net profit for the year ended March 31 at $18,318,000, compared with $19,905,000 in 1983. However, the company still announced a 1:5 bonus issue of ordinary shares, the ordinary shares issued in August, 1983, as a 1:4 cash issue which do not currently rank for dividends, ranking for the purpose of the bonus issue. All bonus shares would rank for the final dividend for the year ended March 31, N.Z. Steel said. The company is looking ahead to a brighter year, with domestic demand strong and profit for the six months to September 30 expected to exceed that for the second half of the past year.

The company said that during the past’ six months, there had been a greater recovery in demand than had been earlier expected. “Production levels of many of the company’s products have been increased, and additional shifts have been added where necessary,” it said. “The increase in production and sales, together with the excellent growth in the sales of the pre-painted range of steel products in particular, has enabled the company to achieve a significantly better profit in the second half (first half — $7.1 million; second half — $11.2 million).” It said that the depreciation provision of $8,058,000 was in line with earlier years, but lower than the last year’s figure which included significant provisions for accelerated depreciation on plant at Taharoa and Glenbrook, which will not be required after the new iron and steelmaking facilities are commissioned.

The directors are recommending a final dividend on the ordinary paid-up capital (including the bonus shares) of 15c a share, making a total of 18c a share for the year ended March 31, 1984 (1983 -18 c). Of the final dividend of 15c a share, 9.5 c will be taxfree to shareholders. The dividends paid for the year ended March 31 are covered 2.6 times by the net profit. The company said domestic demand was currently strong for most of the groups products, running well above budget and export prices were firming. “All plants are producing at near full capacity and at Taharoa an additional shift is being added to cope with increased ironsand concentrate demand from Japanese steel mills. “The profit for the six months to September 30, 1984, should exceed the $ll million achieved in the second half of the year to March 31, 1984,” N.Z. Steel said.