UNION-CASTLE STEAM OUTLOOK
I am afraid there is little in Mr. Robertson F. Gibb's review at the Union-Castle meeting to encourage Ordinary stockholders in hopes of early dividend payments. He em- phasised the fact that until the company is able to refund outstanding loans, which now amount to the formidable figure of £4,500,000, it will have to continue to make large annual repayments in accordance with the terms arranged. That inevitably implies conservative finance. He also dis- cussed at some length last year's rather surprisingly sharp fall in profits from voyages. This he attributed to four main factors. Revenue from outward cargo was consider- -ably reduced by the falling-off in exports to South Africa ; revenue from homeward freight fell sharply, partly owing to the decision of the conference Lines, in face of consider- able agitation, to reduce rates for fruit by 7s. 6d. a ton, and partly owing to the reduced shipments of wool and other commodities. Gold shipments from the Cape virtually ceased during the second half of 1938, and, in addition, the company had to face increased expenditure, particularly for fuel, wages and insurance.
As to 1939 prospects, Mr. Gibb spoke in cautiously optimistic terms of the general -trade outlook in South Africa, and the company will certainly benefit from the re- sumption of gold shipments which has just taken place. On the other hand, it is difficult to imagine that there will be any substantial expansion in the general volume of cargo carried, unless world trade conditions, now so closely de- pendent on European politics, take a decided turn for the better. There is, however, one strong feature about this company's position, and that is that it has completed its rebuilding programme, and will soon have completed its re-engining programme. It thus possesses a fine up-to-date fleet, which has been constructed at a time when shipbuild- ing costs were considerably lower than they are today. The long-term prospects are correspondingly enhanced.
Previous page
