STATE COAL

Evening Post, Volume XCVI, Issue 138, 7 December 1918, Page 4

STATE COAL

REVIEW OF A YEAR

The net profit earned represents a return of 6.80 per cent, on the gross capital expenditure to date, and is equal to 7.92 per cent, on the total turnover for the year, which amounted to £308,759 15s 3d (states the annual report of the State Coal Mines). In comparison with the figures for last year there has been an increase of 1.52 per cent, in the-profit earned and 0.48 per cent, in the turnover.

Point Elizabeth Colliery made a profit of £23,672 0s 3d, as against £18,016 15s Id for la-st year, an increase of £5555 5b 2d. The cessation of expediture on development work, in view of the approaching exhaustion of the mine and the fact that the assets oi this colliery have been written down to such an extent that no further provision for depreciation has been necessary, is largely the explanation of the improvement shown in respect to this colliery during the past two years. The present book value of the valuable plant and machinery *t this mine, together with the buildings and workmen's cottages, is now only £1387, which is a purely nominal value.

The Liverpool Colliery returned a net protit of £4825 10a 9d, as against £254 10s 3d for last year. The improvement in the net profit earned by this colliery has therefore been substantial, and but for the writing-off of the book valuo of the bins and screening plant destroyed by a landslip in January last would have amounted to close on £12,000. It was consideredl advisable to make provision for the total writing-off the book value of this asset in thia year's accounts instead of writing off a proportion each year until liquidated, and the sum of £7064 was accordingly. earmarked for this purpose. In respect to the depots, the result in the aggregate has been a loss of £917. Christchnrch and Wanganui show a profit on the year's operations, while Wellington and Dunedin show a loss. In the last annual .report, attention -was drawn to the necessity, owing to increased operating expenses and restricted turnover, for increasing the retail prices of coal with a view of enabling each depot to show a reasonable margin of profit over working-expenses arid to provide for contingencies. Nothing, however, was done in this connection, as it was considered inadvisable to increase the price of coal to householders during the currency of the war; and, as sea freights from the West Co3st to all ports were advanced 2s 6d per ton without any corresponding increase being made in retail prices, a trading loss on the depots ■under these circumstances was inevitable, and will, moreover, continue until such time as a revision of selling-rates takes place. These remarks apply with special force to the Wellington depot, which is more unfavourably situated, than the other depots owing to exceptionally heavy overhead expenses andl increased cost of d«lirery.