Crown Forest has profit turnaround

Press, 2 November 1984, Page 18

Crown Forest has profit turnaround

Fletcher Challenge’s Canadian subsidiary, Crown Forest Industries, has come out of the red with net earnings in the quarter to September 30 of sCanl.7 ($NZ2.45).

Crown Forest had a net loss of $Can3.2M in the June quarter this year, attributed to industrial relations problems and poor timber markets.

The latest result is a 21.4 per cent rise on net earnings in the corresponding 1983 quarter.

A company statement points to strong demand for newsprint and market pulp for a 46 per cent pre-tax earnings improvement to $Can3.5M (SNZS.47M), compared with the corresponding quarter last year. Sales in the latest September quarter were $Can2O7.BM (SNZ32SM) up 7

per cent from the 1983 period.

The company’s pulp, newsprint and kraft paper machines at Elk Falls operated at capacity during the quarter and a number of production records were set in the latest quarter, the company said. Crown Forest’s president, Mr Carl Ryan, said the company’s container and packaging business improved results during the quarter and the company’s wholesale distribution arm, Crown Paper, increased sales and maintained earnings despite competitive pressure on trading margins.

He said the company’s Crown Stores subsidiary continued to feel the impact of sluggish economic activity in British Columbia and Alberta.

Mr Ryan said the wood products business continued to be severely depressed, with some prices as much as 40 per cent lower than those recorded during the peak of 1983. He said the outlook was mixed for the balance of the year.

“There is no significant improvement in prospect for lumber and plywood; but the pulp and paper division is expected to -continue its strong performance.”

Mr R. R. Trotter, the Fletcher Challenge - Chairman, welcomed Crown Forest’s return to profit with a result which was on plan for the over all North American group to show “a small but positive” contribution for the 1984-85 period after taking into account funding charges.