LOBITOS OILFIELDS
INCREASED NET PROFIT
THE thirty-first annual ordinary general meeting of Lobitos Oil- fields, Limited, was held on July 4th at Winchester House, London, E.C. Mr. H. C. R. Williamson, the chairman, presided.
The Chairman, in moving the adoption of the report and accounts, said: The most noteworthy feature of our investment position is the increase to £329,500 in our holdings of British Government securi- ties. At December 31st last the value of our investments, apart from the shares in our subsidiary, considerably exceeded the book value, and this continues to be the case to-day, though to a lesser extent, as is natural in view of the depressed state to which markets have been reduced.
If you will turn to the profit and loss account the net trading profit exceeded that of the previous year by £7,000, but there was a reduction of £46,000 in the dividend received from our Peruvian subsidiary. After making adequate provision for taxation we are left with a net profit of £252,231. Added to the amount of £219,479 brought forward from last account, we have to deal with a total of £471,710. An interim dividend of 5 per cent. has already been paid, and the board proposes the payment of a final dividend of 5 per cent. and a bonus of 5 per cent., leaving £239,138 to be carried forward.
The tanker fleet was fully employed during the year and, in spite of the weakness of tanker freights, operating results were more satisfactory than for the preceding period. The outlook for tanker freights is not promising at the moment. So far as our own ships are concerned, however, they are mostly employed in carrying our own products; nevertheless, they are not getting any younger, and your board feel it, therefore, prudent to add £50,000 to tankers reserve, thereby building up this fund to a figure which would allow of the purchase of new tonnage should it be advisable.
The refinery at Ellesmere Port has continued to show profitable results, though the margin of profit was not so good as in 1937.
From the Peruvian subsidiary we received a dividend of L92,000 net for 1937-8, as compared with a dividend of £138,000 net for 1936-7. The footage drilled was practically identical with that of the preceding year, while production at 358,525 tons showed an increase of 16,493 tons. Your board is glad to be able to recommend a repetition of last year's distribution by way of dividend and bonus. We shall, per- haps, be criticised in some quarters for our recommendations in regard to strengthening our reserves and for increasing the amount of the carry-forward. I am satisfied, however, that we are doing the right thing. The report and accounts were unanimously adopted.
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