Amadeusz Juskowiak

Cra expects to pay final dividend of 10 cents

CRA Ltd CRAAS said it expected to pay a final 1986 dividend of not less than 10 cents a share after July 1 making 13 cents forthe year against 15 in 1985

The mining and smelting group earlier reported 1986 net earnings rose to 1382 mln dlrs from 878 mln in 1985 against analysts forecasts yesterday of 125 mln to160 mln

CRA said it was deferring consideration of a dividend until later this year to provide the benefit of dividend imputation to its shareholders After July 1 dividends will be taxfree to shareholders provided they come out of earnings on which the full 49 pct company tax rate has been pid

The company operates on a substituted tax year not the fiscal year ending June 30 and as a result has incurred tax at the 49 pct rate on 1986 earnings CRA said in a statement

Consequently it has funds available for distribution with dividend imputed but is waiting to see the imputation legislation before determining the final payout it said

Despite the higher net earnings CRA said 1986 was a poor year for the minerals industry with the notable exception of gold producers

Prices for major metals expressed in real US Dollars declined to the lowest levels in about 50 years it said

Fluctuating exchange and interest rates added volatility and uncertainty while the revaluation of the yen is leading to substantial restructuring of Japanese industry CRA said

World demand for metals is growing slowly Inventories have steadily declined with supply and demand in better balance but overcapacity continues CRA said

Turning to contributions to its earnings CRA said Bougainville Copper Ltd BUVAS contributed 313 mln dlrs while its share of Comalco Ltds CMACS net was 378 mln

Net earnings from ironore operations were 1118 mln dlrs against 1492 mln in 1985 it said

Lead zinc and silver mining and smelting operations incurred a net loss of 668 mln dlrs against a 381 mln loss in 1985 CRA said

Coal activities resulted in a net profit of 367 mln dlrs against 341 mln while salt raised its contribution to 47 mln from 28 mln

CRAs share of earnings from the Argyle diamond project amounted to 120 mln dlrs against nine mln in 1985

CRA said the main item in its 25028 mln dlr extraordinary loss was a 1729 mln writeoff of unrealised foreign exchange losses on borrowings as required by a new accounting standard

Other extraordinary items were 633 mln dlrs provided for closures and writedown of assets and a 141 mln increase in future tax provisions CRA said

Cash flow continued at a high level being 9506 mln dlrs before capital expenditure against 102 billion in 1985 The strong cash flow coupled with the proceeds of the 1986 rights issue and the use of existing cash balances enabled group debt to be reduced by nearly 500 mln dlrs

CRA said it held forward contracts at yearend to buy 985 mln US Dlrs to hedge part of its foreign debt This cost 470 mln dlrs after tax included in the net interest cost