THE ORIENT COMPANY

Otago Daily Times, Issue 22778, 14 January 1936, Page 11

THE ORIENT COMPANY

SUCCESS OF NEW LINER CRUISES NOT PROFITABLE , (From Our Own Correspondent) (By Air Mai!) LONDON, December 21. Sir Alan G. Anderson, presiding at the annual meeting of the Orient Steam Navigation Company, announced that the profit and lots balance for the year was £249,469, or approximately £30,000 better than for the previous year. This figure includes a profit on sale of investments of £191,754, which exceeds the similar profit in the previous year by £IOO,OOO. On the other side of the account, £150,000 is transferred to general reserve, which exceeds the transfer made last year by £IOO,OOO. “After the flood-tide,” said the chairman, “it is prudent to expect the ebb, and as a marked rise of gilt-edged securities is not likely to continue for ever we should raise false hopes if we applied such profits as this to increase our dividend. We recommend for the year a dividend of 5 per cent., free of tax, on the ordinary shares. “ Our trade has shown a small improvement in passenger earnings on the mail line, which has been almost exactly offset by a fall in the profits on cruises in European waters. This result in a jubilee year and with an attractive fleet disappoints me. It shows-, I think, that in spite of some improvement in the world price of their commodities our clients in Australia are not yet able to travel so freely as was, and will, we hope, again be. their custom.” Third-class passengers to and from Australia have practically ceased to travel. “Third class” as a description of accommodation, said Sir Alan Anderson, is out of date, so when the alterations which the company intend carrying out to Drama, Oronsay. and Otranto are complete they would choose an appropriate title under which to offer to the public the opportunity to travel at a rate lower and under conditions less luxurious than tourist, but different from what used to be known ns third class. Four shins were despatched on 16 cruises in European waters, and though more than the running costs of the ships were earned, there was not enough to pay for depreciation. In Australia, the company despatched three ships on five cruises, which were well patronised. HINDRANCES TO TRADE. Referring to the carriage of cargo, the chairman said that the attempt of the lines to rationalise had been made more difficult by the effort of the British Empire to raise prices by control of quantity." Such an ambitious attempt must proceed by trial and error, and in the early stages grave inconvenience and loss had been caused. It could not be too clearly brought to the notice of our rulers that, in order to present herself on an Australian berth at an appointed day. a ship must be worked into position months in advance, and must even sail from Great Britain about two months before the appointed date. If. therefore, the even flow of cargo was to be disturbed by quota or control, the only way to avoid extravagant expense was by planning far ahead.

“Tn size and speed.” said the chairman, “the Orion somewhat exceeds hut is comparable to our five other ships of the same class, but in detail you will find when yon travel on her that we have made good use of her extra beam and

of modern ideas. She is, we think, a marked advance on anything that was possible until the last few years, and is a ship of which not only her shareholders but her country may well be proud. Among other novelties we have conditioned the air in her dining saloon. THE ORCADES. “As we shall shortly require to replace Orsova, and there is every indication that shipyards may be better occupied in the next few years, we have placed an order with Messrs Vickers-Arrastrong for another vessel of approximately the same dimens.ions and speed as Orion, to be named Orcades and to be delivered in the summer of 1937. Including Orama, which was delivered in 1924, we shall up to the expectant delivery of Orcades in 1937 have in 13 years built seven ships costing approximately £]jooo,ooo each, which, as you will agree, proves confidence. “We are advised that we have power to make an investment in air on a moderate scale, but as air transport was not contemplated when the Orient Company was formed we may find it desirable to ask you to approve an extension of our constitution to give specific authority to take our due share in this new development of our enterprise.” SUBSIDISED COMPETITION.

The chairman finally touched on tnc subject of subsidised foreign competition. “ The British lines are not being driven off the sea by their own failure,” he said. “They are not asking for a subsidy to shelter or condone inefficiency, but no private purse can compete against the concentrated wealth of a great nation. While we cannot believe that the British Governments concerned will aliow such a foreign monopoly to control an important route. I need scarcely remind you that our only direct interest is to deplore the disturbance which is spread by subsidies beyond the route immediately involved. Aii uneconomic standard of luxury maintained on one route reacts upon and depreciates services such as ours conducted on economic lines elsewhere.”

It was agreed that a dividend at the rate of 5 per cent., free of income tax, on the ordinary shares be paid.