Amadeusz Juskowiak

Comalco says lower costs helped return to profits

Comalco Ltd CMACS said its return to profit reflected reduced costs improved primary aluminium prices and its withdrawal from a Japanese smelter venture

It said the earlier reported 571 mln dlr profit for the year ended December 31 against a 6913 mln dlr loss in 1985 was also aided by lower interest rates on US Dollar debt and greater sales of bauxite and aluminium

Comalco said it expected to pay at least a four cents per share final dividend delayed until July 1 to take advantage of proposed dividend imputation laws

This would make five cents for the year against a first and final of one cent in 1985

Comalco said the aluminium industry continued to suffer from low prices and excess capacity though the weak Australian dollar had helped earnings

Withdrawal from the Showa Aluminium Industries KK joint venture had been recapitalised in expansion by the New Zealand Aluminium Smelters Ltd project with Japans Sumitomo Aluminium Smelting Co Ltd permitting repayments and increases in liquid funds totalling 165 mln dlrs it said

As previously reported Comalcos Commonwealth Aluminium Corp unit has conditionally agreed to sell its smelter at Goldendale Washington and port facilities at Portland Oregon to Columbia Aluminium Corp

Comalco said it had made a 273 mln dlr extraordinary provision for Goldendale losses and closure costs but that if the sales agreement were completed it would reduce the provision made in the 1986 accounts

The other items in the total extraordinary loss of 1405 mln dlrs were a 1029 mln writeoff of unrealised exchange losses and 103 mln for an increase in future tax provision

REUTER