METALS SHARE LOSSES

Dominion, Volume 32, Issue 81, 29 December 1938, Page 12

METALS SHARE LOSSES

Depreciation Of £12,000,000

COST TO'INVESTORS

Falling share prices throughout the last 12 mouths have caused serious losses to shareholders in the majority of public companies, and it is certain that no group has been affected to such an extent as holders of base-metal scrip, states the "Herald,” Melbourne. The combined results of the six leadin" producers (North and .South Broken Hill, Mount Lyell, Electrolytic Zinc, Zinc Corporation and Sulphide Corporation) show that profits have slumped by. more then £1,000,000 and dividends by £062,646, while the present market value of the various shares represents a depreciation of £11,388,756 on the levels rijluig when the 1938 financial year commenced.

The prosperity of these companies is governed entirely by metal prices, which, as the accompanying comparisons in sterling show, were well below the level of the previous 12 months and influenced a big shrinkage in income.

Lower income has meant smaller profits and reduced dividends, and these factors have been reflected by substantially reduced share prices. Dividends Paid. Movements in dividends paid by the four leading companies for the past two years show how shareholders have been affected. > ■

Of the future, all that can be said is that the outlook is not without hope. Some investors will derive comfort from the fact that present metal prices are close to the lows of recent years, the suggestion being that the end of the drift is in sight. Whether values will rise, however, is problematical. The trend. during the next six months will determine the profits and dividend rates for the current financial year. A hig factor is that more efficient mining and improved metallurgical practice in recent years have placer] the companies in a position to take advantage of any upward swing in metal prices. The trend of world affairs during the next few months is a factor which must not be overlooked in attempting to assess the probable course of all commodity prices, including metals.

Year to Lead' Silver Zinc Copper 3 une 30 (ton) (oz.) (ton) (ton) 1930 SI 0/4/5 2/2.4 £15/3/11 £40/14/8 1937 £23/2/8 1/9.9 £20/2/1 £00/8/3 1938 £17/10/1/9.1 £10/15/1 £44/17/5 Current price £15/3/9 1/9.8 £14 £50

1937 1938 Broken Hill I*.c» Amount P.c. Amount South . 95' £760,000 50 £ 400,000 North B.H. . 120 840,000 GO 420,000 Mt. Lyell ... . 171 271,250 71 116,250 Elec. Zinc .. . 171 455,000 15 390,000