Forestry Corp shows $80M half-year surplus

Press, 13 December 1989, Page 8

Forestry Corp shows $80M half-year surplus

By

BRENDON BURNS

in Wellington

The Forestry Corporation has reported an operating surplus of $80.7 million in the first six months of the financial year, but warns waterfront industrial ac-. tion may impact on the remainder of the year’s result. The Forestry Corporation’s half-yearly report was among a number tabled in Parliament yesterday.

Others include Government Property Services, Ltd, the Airways Corporation, the Govern-: . ment Computing Service, Ltd and' 1 the Earthquake and War Damages Coryinqissipn. ' • The Forestry Corporation’s! reported surplus was said to, maintain a steady increase, with the $80.7 million result up from $49 million in the same period last year.

Net revenue was 40 per cent ahead of last year, because of both price and volume increases.

South Korea remains the corporation’s main market, although sales to Japan have increased.

Economic restructuring in China is said to be likely' to impact on results in the remainder of the year, as will port reform.

"Industrial action on the waterfront posed problems for both sawn timber and log exports, the direct and indirect costs of which have been significant,” said the report. > The Forestry Corporation reduced its salaried staff during the half-year by 33 to 486 people. In October, the corporation was confirmed by legislation as manager and agent for the sale of the Crown’s forestry assets. It said in its report yesterday that it

will make every reasonable endeavour to make the sales and maximise the proceeds to the Crown.

The legislation, the Crown Forest Assets Act, 1989, also protects potential Maori claims to State forestry land and upholds public access rights. < J • Government Property Services, Ltd, reports Government departments are becoming “hard-nosed” about securing commercial premises. In its half-yearly report, G.P.S. said there was a rapidly developing sense of commercialism among bureaucrats. They were said to have not been backward in exploiting a depressed property market to their department’s advantage. in spite of the tough commercial property market, G.P.S. said it'had met its budget in recording a net profit before taxation of $4.7 million.

Competing with the private sector, it had leased more than 100 tenancies involving more than 245,000 square metres of space, and sold or contracted to sell nearly 40 properties. The half-yearly report included a reference to the loss G.P.S. sustained from investments in; Equiticorp. • The Airways Corporation reported a small drop in revenue in the first six months of this financial year, compared with the same period last year. Landings by aircraft at the airports remained static and reduced airways fees were said to be responsible. Revenue from airways dues was $41.89 million in (he six-! month period, down from $43.54 million. Revenue is expected to drop slightly in the second half of the year because of the July reduction in landing fees, although the

Commonwealth Games will boost passenger numbers. An end-of-the-year after-tax profit of $8.5 million is forecast. • The Government Computing Service forecasts its revenue growth for the year will exceed 20 per cent, compared with an average New Zealand industry forecast of 10.5 per cent. Revenue of $55.3 million was ahead of forecast and an aftertax profit of $4.9 million for the first six months declared. The number -of staff, at 440, was down from 520 in April in 1988, but staff turnover was now little more than 10 per cent, compared with 30 per cent more before corporatisation. • The Earthquake and War Damage Commission, in its penultimate report before it is restructured, said it had a progressive six months to September 30. Legislation was introdued earlier this month to replace the

commission with a Disaster Insurance Commission. The new commission will seek to reduce the Government’s contingent liability in the face of a big disaster. The existing commission’s halfyearly report said it has recently approved, with reluctance, the investment of maturing funds into short-term, non-tradeable securities. It said a new investment strategy has proved to be more complex than originally envisaged and awaits final approval from the Government. An earthquake on August 8 produced dozens of claims to the commission, including 22 from Canterbury, five from Marlborough and eight from Nelson. But the commission said threequarters of the claims were found either not to be earthquake damage or were under the minimum excess of $2OO.