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TIRADE AND FINANCE
NEWS AND COMMENTS
ELECTROLYTIC ZINC CO.
ANNUAL STATEMENTS.
DEVELOPMENTS ON ? WEST COAST.
In our review of Stock, 'Exchango move,
menta on'Saturday last wo referred to the
net profit of £390,077 shown by the Elec-
trolytic Zinc Company for the twelve
months ended June 30, 1927. The gross
profit on working waa ¿649,461, and after
providing £145,000 amortisation and de-
preciation, and £114,884 tor general ex-
penses, the net profit Is £390,077. Adding
the balance from last year "of £26,686,
there Is available £416,763. The sum of
£20,000 is written off investlgational re-
search and development account, £40,000
Is set aside toward new plant and devel-
opment of the West Coast mines, and
£12,100 appropriated to debenture sink-
ing fund reserve. Dividend at the rate of
12 per cent, per annum on both prefer-
ence and ordinary shares absorbed
£312,000, and the balance carried forward
Is £32,663. A comparison of the resulta
Is given hcreunder:
1927 1926 1926
Gross profits . . 049,461 697.973 6B1Í600
Provision for depn. 146,000 145,000 140,000
General ess., etc. 114,384 132,274 136,280
Net profits . . . 390,077 420,699 375,380
Net Dlvl- To re- Written
Profits, deuda, serves off, etc.
1S23 . . 285,406 220,442 62,640 101,98-i
1924 . . 361,349 187,150 151,560 20,000
1925 . . 375,380 276,790 52,100 40,000
1926 . . 420,099 312,000 52,100 40,000
1927 . . 39,077 312,000 12,100 60,000
The actual net profits show -a reduction
of £30,622 on the 1926 record figure, but
as there has been a decline In metal prices
we aro Inclined to think that the directors
Have this year been especially conserva-
tivo in valuing the stocks on hand. At
any rate the continuation of the 12 per
cent rate of dividend seems to indicate
that they are not over-anxious as to the
offoct of reduced metal prices on the
profits of the immediate future Forty
eight thousand, six hundred and five tons
of zinc were produced at the Risdon
works, representing an Increase of 2,022
tons, or 5Vi tons per day. over the pre-
vious year's figures, and obtained as a
direct rssult of Improvements in the vari-
ous processes involved and without any
.additions of plant. Further benefits are
«xppct°d from this source. The produc-
tion .figures for the last four years are
given hereunfler
1027 1920 1925 1024
, - Tons. Tons. Tons. Tons.
ZinC . . . ,4S,605 ,40,583 46,929 41,708
Lead . . 7,620 8,000 7,030 6,805
Copper . . 243 201 250 257
Cadmium 160 . «0 168 154
Silver . . 1,134.000 1,179,000. 929,500 890.600
, Recoveries of lead show a decrease of
«801 tons, and there is a drop of 45,000
ounces in .production of. silver, due to the
lower contents of . concentrates treated.
fPhe following extracts briefly cover the
Information contained In the reports:
'.'Realisation of zinc' has been regularly
maintained and accounted for th» full
output, Australian demand steadily In-
creasing, and absorbs more than one-third
of the total production. Sales of super-
phosphate show a gratifying increase
Dver previous y?ars' sales, and a further
Increase is expected. The production of
high grade superphosphates and mixed
fertilisers totalled 20,524 tons, as against
17,872 tons In 1926, and sales wcro 19,811
Jons,, as against 18,599 tons.
WEST COAST MINES.
"At the West Coast mines active inves-
tigations have proceeded to determine the
extent of the ore bodies, and best meth-
ods of metallurgical treatment. A con-
siderable amount of developmental work
ha? yet to be done, and Is laid out with
the object of enabling the safe and steady
production of a minimum quantity of
2,000 tons of ore weekly. During the year
28,525 tons were mined from the Rosebery
mine and 13,021 tons from the Hercúlea
mine, 39,703 tons being forwarded to the
company's concentration mill at Zeehan.
Ore reserves from these mines are placed
at a minimum of 1,400,000 tons of average
grade oro. The above mentioned produc-
tion of ore was won through the develop-
ment work and not from direct ore ex-
traction operations. It is proposed to
continue development until the ore bodies
have been systematically opened up. Dia-
mond drilling recently carried out shows
that the lode at Rosebery exists outside
the boundaries taken into account in esti-
mating the above ore reserves, but as the
bores were widely spaced no reliable esti-
mate of possible further tonnage Is feas-
ible at the present moment. Preparations
are being, made for the mining of larger
tonnages, and the commencement will be
made next year with the erection of a
mill designed to treat 100,000 tons of ore
per annum.','
Many investors .and shareholders In
this company havo'been anxious to know
how the fall In the price of metals has
affected the company, and also the posi-
tion regarding the favourable contracts
for the purchase of raw materials, and in
this connection the directors comment as
follows:- *..
"Reference baa been made in previous
reports to our contract* for the purchase
of Broken Hill sine concentrates. The
total quantity purchased waa 1.U0.OO0
tons, and up to June SO last 680,000 tons
had buiti used, thus leaving a balance of
(20,000 tona Allowina; for a ataadily in-
creasing output from,the company'a own
mines, it is estimated that the balance
mentluned will not be exhausted until
1933.
"After that date tbo company la pro-
tected for ita supplies of raw material
by
(1) Broken Hill production of zinc
concentrates, a substantial proportion of
which is reserved for treatment in Aus-
tralia.
(2) The West Coast mines, which
will then provide a tonnage represent-
ing a considerable proportion of the re-
quirements of the Risdon plant
"The all-round decline in metal prices
has naturally reduced tht returns from
realisation of products, but the effect on
profits has been substantially offset by
favourable factors in other directions,
principally the following:
(1) Lower price of raw materials aris-
ing from the incidence of the sliding
scale clause In our contract for the pur-
chase of zinc concentrates.
(2) Increased output of sine
(3) Improved efficiency and recovery
of metal contents of materials treated.
(4) Lower production coats.
(5) Improvements in technique in
roasting and acid manufacturing opera-
tions, thus effecting a marked reduction
in the cost of the preliminary prepara-
tion of the raw materials for electro-
lytic treatment."
In reviewing this company's operations
twelve months ago wo Indicated that with
the success achieved to date the 15 per
cent, dividend confidently expected In
some quarters was a. matter of early
attainment provided metal prices kept up
Unfortunately there has been a fall In the
price of metals, so that the higher divi-
dends are out of the question, In the
meantime at any rate. Advices from
overseas seem to indicate that during the
next few months the demand for zinc is
likely to expand, which would of course
have a beneficial effect on the prlceB otk
talnable. For the period July 1 to Sep-
tember 22,1927, the Electrolytic Zinc Com-
pany's production of zinc was 11,282 tons,
as against 11,033 tons for tho correspond-
ing period of 1926. Production of lead
and silver at 1,530 tons and 207.000 ounces
respectively, compared with 2,050 tons of
lead and 259,000 ounces of sliver for the
corresponding term of the previous year
The principal balance-sheet items for
the last three years are given hcreunder:
" Liabilities.
1927 192G 1925
Capital . . . 2,600.000 3,600,000 2,600,000
Debentures . 404,033 404,033 404,033
Creditors . . 159,338 211,127 141,743
Deposits . . . 263,326 242,269 415,522
Overdraft . . 39,047 - 66,692
Reserves . . . 1,168,960 971,310 757.000
Assets.
Machinery and
plant . . . 2,841,539 2,076,795 2,533,086
Mine account 397,287 379,195 346,043
Stores, eto . 661,210 762,709 771,890
Debtors . . . 343,114 245,517 400,677
Machinery and plant is by far the larg-
est Item, and under tho present form of
accounts shareholders have to accept the
£145,000 set aside for amortization, de-
preciation, and renewals reserve as being
the only amount of depreciation provided
during the twelve months under review.
Whether any further sum has been charg-
ed in working account is a matter of con-
jecture, and indeed very probably such a
course has been taken by the directors.
The lower metal prices have affected
share values, which aro now approxi-
mately 82s for preference and 30s 6d for
ordinaries, returning 7.5 per cent, and 7.9
per cent, respectively. When wo review-
ed tho company's accounts twelve months
ago preference shares were worth roughly
38s Gd, and ordinaries 37s Gd.
COMMONWEALTH EXPORTS.
BUTTER ANO CHEESE.
CANBERRA. October 17.
The returns compiled by the Markets and
Migration Department for the week ended
October 8 show that the total export of
butter from the Commonwealth for that
period was 18,051 boxes. Of that amount
15,108 boxes were sent to the United King-
dom. Victoria supplied 11.176 boxes of the
total amount. Tho quantity exported from
the beginning of July is 89.8S7 boxes, of
which Queensland liar, provided 42,380
boxes, and Victoria 88,126. Cheese export-
ed for the same period amounted to 6.2P2
crates, or which 4,913 crates were from
Queensland.
CUSTOMS RETURNS.
LAUNCESTON, October 17.
Customs returns at Launceston last week
were:-Duties, £1,248 6s. 4d.; excise, £628
14s. 8d.; miscellaneous, £1 9s. 2d.; total,
£1,878 10s. 24.
MARINE BOARD OF HOBART.
The following amounts were the Marine
Board's collections at Hobart for last
week:-Wharfage, £416 14s. 2d.; tonnage
rates, £43 17s. 4d.: pilotage, £20: miscel-
laneous £152 is 7d.: total. £631 13s. td
$