Golden Bay cash flow improves

Press, 24 April 1986, Page 26

Golden Bay cash flow improves

The cash position of Golden Bay Cement Company, Ltd, again improved during the year ended December 31, the company’s annual report shows. The improvement came chiefly from internal sources, said the new managing director, Mr G. W. M. Strachan, such that borrowings have been reduced by $3.6 million. In addition a further $3.2 million was spent on capital expenditure. However, little was spent on development, he said. As a result, working capital improved by $3,990,000 to $10,039,000 during the year. There was no taxation payable on the year’s profit, which, as previously reported, improved 34.2 per cent to $9.7 million.

However, there are no more losses to be carried forward. These losses, which arose in the early 1980 s under the Energy Conservation Incentive Programme, provided the company during the past five years with a “very substantial cash flow advantage,” Mr Strachan said. But from now onwards this advantage will be eroded through higher taxation during the next 15 years. Mr Strachan said that cement sales in New Zealand increased 5 per cent to 863,000 tonnes, and that Golden Bay improved its domestic sales by 6.6 per cent to 481,000 tonnes —- 55.7 per cent of the market. “Although most regions showed a better perform-

ance, supplies to the Clyde dam contributed significantly to the increase.” Exports increased 20.6 to 82,000 tonnes. Output Increased significantly, and considerable production economies were obtained. Turnover rose 14.9 per cent to $80.2 million; operating expenses at $61.5 miHion were 14.1 per cent higher, interest charges were much the same at $4.1 million, and depreciation rose $414,000 to $4,885,000. Shareholders’ funds increased from $66.7 million to $72.7 million, and shareholders’ equity improved from 64.5 to 67.1 per cent The earning rate on shareholders’ funds rose from 10.7 to 13.3 per cent