STATE COAL MINES.

Star (Christchurch), Issue 12064, 20 July 1917, Page 6

STATE COAL MINES.

THEIR RETENTION JUSTIFIED. 'SUBSTANTIAL ON YEAR'S WORKING. The report and balance-sheet which lias been forwarded by Mr.F. J. Gunn, sales manager of the. State Coal Mines, to tho Under-Secretary of the Mines Department (Mr Morgan), an exceedingly satisfactory position. The document, which covers tho working of tho mines for the .year ending Maxell 31 last, shows the ne.t profit, after making full provision for interest, depreciation, war bonus, and all annual charges, to bo £18,521 os 9d, made up as follows: — £ s. d. Point Kli/.abeth colliery (net profit) . . . 18,016 15 1 Liverpool colliery (net profit) . . . 254 10 3 Seddonvillo colliery (re- _ covery) . . - 4-1 15 0 Depots (.net profit) . . 205 o 5 Total , . ■ £18,521 5 9 The profit earned represents a return of 5.28 per cent on the capital expenditure and is equal to 7.44 per cent oil tho turnover. Tho Point Elizabeth colliery has made a profit of £IB,OIO ok Id, as against £8779 0s Id for .the previous year. Tho increase in profit at this mine, therefore, has been substantial, and is partially due to tho decreased amount charged as depreciation, aa compared with former years, and to tho cessation of expenditure on development work iii view of tho approaching exhaustion of tho mine. The assets of this colliery have been written down to such an extent- that no further provision for depreciation is necessary. The present hook value of the valuable plant and machinery at the mine, together with the buildings and workmen's cottages, is only £llß<i, a purelv nominal value.

Instead of a, loss of £IO.IBB 12s as shown on tho 1910-10 balance-sheet tin- Liverpool oollicrv (hiring the past year returned a profit. ol £2o I 10s 3d. \Vhile the figures indicate a good recovery, .states the report, the result is disappointing in viqw ol the tonnage produced and the largo capital expenditure (£172,008) on which interest ha. - ; to hp earned. In order to place ibis colliery on a. sound footing. it is imperative that the present f.o.b. rates for coal should he increased to such an extent; as to provide a reasonable netprofit on the undertaking and to pelmi;ti a sufficient suin to l>o nsido nnniuiliy as a sinking j'nnd for tho rcdemption of tho debenture and capital. It must not he overlooked that the Point Elizabeth colliery is nipully approaching an exhaustion stage and when it ceases operations tho whole ot the interest charge, at present apportioned between the two mines will have to ho home by tlw> Liverpool collii respect to the depots, "Wellington and W nngiinui show a loss on the \cai s. operations. Christehnreli (owing to a large ex-steamer trade) and Dunedin show a profit. Extensive alterations were, carried out at. Wellington the cost of wliibh was included m working expenses. The increase in 'wages, in common with other trading concei ns, and the increased cost of cartage, supplies and repairs accounted in a measure for the lrfss. Placing of large contract orders had been discontinued and tho present policy is to restrict, the depots to a legitimate retail trade. The. margin of profits on large wholesale orders")'* the explanation of tlie relatively large profits that, the depots have been showing for the past two years. The report recommends that the retail price of coal sold through the dejwts be increased with a view of enabling each depot, to show a reasonable margin of profit over working expenses and to provide for contingencies. OUTPUT. The gross out-put of coal for the year from the mines was 200,782't0n5, being an increase of 1/5.0-1;} tons as compared with tlie previous year. Of the gross output- Point Klizabeth supplied 132.71)0 tons and the Liverpool mino 1D.'},013 tons, the net tonnage from the two mines after allowing for consumption and wastage being 2.")2.810, compared with 240,130 tons in 1010. Tlk; depots were supplied with 97,001 tons, the railways with ;jo,ooo, the, shipping , companies with 50.018, the gas companies with 27.075. other Government- concerns with 1312, and other con.sinners with 21,;j9-I tons. SALES. The total sales for the year comprised 200.0- e )8 tons, valued at £218.817, as compared with 211,022 tons, valued at £2O j .•")(} 1. for the preceding year. 01' the aggregate value o! coal sold from the two mines, that sold from Pori Elizabeth was £120,542, and £128,271 from Liverpool, at an average price per ton on tho totial sales of 19s -1.70(1. showing an increase on the ligures of 1910.

OTHER POINTS TN THE REPORT,

The depots sold 103,269 tons, valued at £l-11.600; the demand for coal of every grade was exceptional throughout tlu* year, and some difficulty was experienced in meeting requirements; the gas companies throughout the Dominion speak highly of the gas-produc-iing qualities of Lh erpoool small coal, and the demand exceeds the available supply of this grade ; tho cost of production at Port Elizabeth shows an increase of 8.26 d per ton, and at Liverpool mine 7.56 d per ton, due largely to the "go slow" policy adopted by tho miners. BALANCE-SHEET ITEMS.

Amount paid as Avar bonus, £9239; written off for depreciation for tho year. £12,229; payments for interest, £8715; payments for sea carriage of coal, £71,120; costi of railway haulage, £2(5,055 ; wages paid for coal-winning, £77,751 ; amount paid for management and office salaries (head ofliceand mines), .02477; gross capital expenditure on tho whole' undertakings to .March 31, £350,712; depreciation writ+on off to date, £187,798 (equal to 53.54 per cent on the gross capital expenditure as above); debenture and loan en pital. £227,601; sinking fund, £13,200; reserve fund, £5884; debit of profit and loss account. £1(5.424 (last year, £23,916); cash in hand and in public account at. March 31 last was £OB,OIB (last year. £34,751); net hook value of permanent or fixed assets (exclusive of floating assets) is £157,123. The report concludes by acknowledging the loyal and efficient services rendered by the accountant, depot managers and staff.