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PROFIT INTO LOSS

EFFECT OF INCREASED COSTS

Directors of Brunner Collieries, Ltd., in their report for the year ended June 30 last, state that the net result for the year, after providing £1915 4s for interest on debentures, and £1573 0s 8d for depreciation on plant and equipment is a loss of £3338 lis ld as compared with a profit of £3805 5s 6d for the preceding year.

The recession is due to increased production costs and reduction in output, the principal increases being wages £2671 9s lOd, maintenance £1335 ls 3d, and employers' liability insurance £626 18s 3d.

A slight increase was obtained in the selling price of coal, but owing to competition of the State and other mines the increase secured was insufficient to offset the advance in costs. The output was 50,873 tons, a decrease of 1652 tons on the previous year. The overhead expenses show a reduction by £250 10s sd. ' A defect in the main boiler necessitated the installation of two new boiler drums, and during the period of replacement the output was adversely affected. As a result of negotiations with the debenture holders, the debenture issue has been extended for a period of ten years from the due date, November 30, 1938, at a reduced rate.of interest of 5 per cent, for the first five years. This will result in a saving of interest of £419 per annum. Although the result for the year is disappointing, it has been caused by factors quite beyond the directors' control. Since June 30, the output has increased, and a coal cutter has been ordered -which it is anticipated will reduce mining costs.

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Permanent link to this item

https://paperspast.natlib.govt.nz/newspapers/EP19381001.2.74

Bibliographic details

Evening Post, Volume CXXVI, Issue 80, 1 October 1938, Page 11

Word Count
275

PROFIT INTO LOSS Evening Post, Volume CXXVI, Issue 80, 1 October 1938, Page 11

PROFIT INTO LOSS Evening Post, Volume CXXVI, Issue 80, 1 October 1938, Page 11