Comalco profit turns to loss

Press, 28 August 1986, Page 29

Comalco profit turns to loss

NZPA-AAP Melbourne Comalco, Ltd, said its 1986 first-half operating net profit of sAust3s.l million was turned into a sAust7l.l million loss for the six months ended June 30 by extraordinary deductions of sAustlO6.2 million dollars.

Comalco wrote off $98.9 million being the balance of the unrealised foreign exchange losses at January 1.

A further $7.4 million provided for the higher

company tax rate of 49 per cent The operating profit compares with losses of $52.4 million in the 1985 second half- and $16.7 million in the 1985 firsthalf (extraordinaries nil in 1985). Comalco said the latest result was due to better aluminium prices, withdrawal from unprofitable joint ventures and lower interest charges. Its operating profit would have been $17.3

million if the extraordinary charge for currency exchange losses had not been made, and the unrealised exchange losses continued to be amortised over the life of the borrowings. Profit after extraordinaries would have been $9.9 million. An interim dividend of 1c a share will be paid (nil previously).

Comalco said international aluminium trading conditions were better

in the 1986 first half than in the 1985 last half, but the buoyant trading conditions in the U.S. market in the first half had slackened.

It had sold non-core and non-performing activities and vigorously tried to contain costs.

These steps, plus some better metal prices and lower U.S. dollar interest rates, had helped improve the "still inadequate” profits.

“The higher level of

market prices, if it continues, should, because of lags, have a greater benefit to the second-half results.than to the first half. The second-half is also expected to benefit from increased bauxite sales.”

Comalco had lower bauxite production 3.61 million tonnes (3.97 million), lower shipments 3.47 million tonnes (3.84 million) and lower alumina production share 440,000 tonnes (465,000).