Alcan profit falls 30.4% to $5.3M

Press, 25 February 1987, Page 35

Alcan profit falls 30.4% to $5.3M

Alcan New Zealand, Ltd, reports a group aftertax profit of $5,326,000 for the year ended December 31, a decrease of 30.4 per cent compared with the previous year. Sales declined from $102.1 million to $96.7 million, and profit before tax was 31.3 per cent down to $8.6 million. Tax was $1,799,000 down at $5,505,000. There was an equity loss of $60,000 after a distribution to Alcan New Zealand, Ltd, of dividends amounting to $lOO,OOO (1985, $439,000). The directors propose a final dividend of 10c a share, making 15c a share for the full year. This is about 62 per cent of the profit available for distribution, a rather higher percentage pay-out than the long term objective of 50 per cent. The directors

consider this to be justified by the strength of the balance sheet.

Trading conditions during the year were more difficult than the previous two years when record turnover and profit results were reported. Sales of semi-fabricated rolled aluminium products were adversely affected by imports from Australia after the lifting of duty thereon, the directors say. The high rise commercial window market remained buoyant during the year and enabled Alcan’s fully-owned subsidiary Horizon Aluminium Products to enjoy a most successful year. Other subsidiaries, for the most part, produced disappointing results; however, there is reason for optimism in 1987, particularly for Onehunga .Glass and Gerard Tiles. Both com-

panies made significant expenditures during the year to increase operating facilities and should benefit in 1987.

It is apparent that the difficult trading conditions of 1986 will continue into 1987 with increased competition from local and overseas companies. The company has made adjustments required to operate effectively within the scope of the economic policies now in place. Competition, particularly from larger overseas aluminium plants, is almost certain to present an increasing problem. Maximum effort will therefore be made.in 1987 to capitalise on the advantages inherent in being a locally-based New Zealand company, especially in terms of service and reliability, the directors say.