Comalco N.Z. $76.8M profit

Press, 31 August 1989, Page 38

Comalco N.Z. $76.8M profit

NZPA Wellington Comalco New Zealand has posted an interim unaudited profit of $76.8 million after income tax and extraordinary items to June 30, compared with $79.1M in the second half of 1988. Comalco N.Z. was established on July 1, 1988, so there is no comparable figure. It released its first annual report early last month, reporting a SI73M profit to December, 1988, including results from previous operations as a branch. The profit before extraordinaries was not given. Sales revenue in the first half of 1989 was down on the previous half year, mainly due to the 16.5 per cent reduction in the primary aluminium selling price from an average SUS24SO (SNZ4IS2) a tonne in the second half of 1988 to SUS2IO3 in the first half of 1989. But the reduced revenue was more than offset by lower operating costs, which benefited from the weaker New Zealand dollar, the company reports. Income tax of $40.3M was up sharply from $20.4M in the second half of 1988, reflecting the increase in the company tax rate, more operating profit and the weaker New Zealand dollar. World aluminium prices continued their steady decline in the first half of 1989 from the high levels reached in the middle of 1988. Opening prices for the year were around SUS24BO a tonne and reached a low of SUSI6S2 in mid-July before recovering slightly. The downward trend in prices reflected more metal produced than demanded. World production for the period was 14.1 million tonnes of primary metal in the first half of 1989, 7.1% higher than for the first six months of 1988. Demand for aluminium was still reasonably firm, although there had been some weakening with the slow down in the U.S. economy, particularly in the construction and motor vehicle sectors. But demand in Japan and Europe was still robust. Prices were holding at about SUSIBOO a tonne. Domestic sales in New Zealand were flat in the first half, reflecting the sluggish economy. “The economy appears to have bottomed, but there is no persuasive evidence of a second half recovery in domestic sales prospects,” the company said. The domestic price for August is $3520 per tonne, compared with $3865 in August, 1988, a 9% decrease. Imports of aluminium sheet and plate continued to be adversely affected by Customs-imposed minimum import values, and by the weaker New Zealand dollar, Comalco N.Z. said.

The operation was a branch of Comalco Australia and is now a private New Zealand company.