National Post du lieu suivant : Toronto, Ontario, Canada • 19

INVESTMENT Financial post Friday, December 16, 1988 Pertamina profits double in its best year since 1975 Restructuring spurs sell-offs, debt plans COMPANY NEWS By Susan Gittins Financial Post CANADIAN companies are restructuring themselves spinning off divisions, selling unproductive assets, downsizing staff levels and renegotiating debt According to the Ontario Securities Commission's latest insider trading report, corporate insiders at Counsel Westar Mining Corp. and Cineplex Odeon Corp. think these moves bode well for the future. But insiders at Walwyn Inc. are a bit bearish.

Counsel director Joseph Rot-man exercised 53,250 Counsel warrants through Chadwill Coal Co. Ltd. and Roy-L Capital Inc. on Nov. 30.

This gives his Roy-L Holdings Ltd. 79,125 shares at $10 a share. Rotman is director of the holding company for financial services, real estate, health care and merchant banking operations. A few days earlier, Counsel announced plans to spin off its wholly owned financial services subsidiary as a separate, publicly traded company. Senior executives think Counsel stock is undervalued because of the diversified nature of the company.

Shareholders will vote at a special meeting Jan. 24. Common shares are trading at about $9y. At Westar Mining, Erik Peterson, vice-president of finance, purchased 50,000 shares of B.C. Resources Investment now Westar Group, for $1.20 a share on Nov.

14 a Westar Group's stock has spiralled steadily downward from $9.25 in 1979-80, reaching a low of 75 in 1987. Now the company has completed write-offs and asset sales and analysts think troubles are over for long-suffering shareholders. The company has been restructured, costs cut and debt reduced. Shares are trading at about $1.15. Lynda Friendly, senior vice-president of marketing and communications at leisure and entertainment company Cineplex Odeon, played contrarian last month.

On Nov. 24 she exercised 10,000 options at $3 and 3,000 at $2.50. This brings her total holdings up to 28,740 shares. Short positions on the stock have been steadily rising on the New York Stock Exchange by 23 to 728,950 shares in the month to Nov. 15.

The short posi- TRADING tion on the Toronto Stock Exchange fell by 10,000 shares to 766,100. But the entertainment group was successful in getting a line of credit with its bankers, led by Bank of Nova Scotia. Cineplex is trading at about $3 on the TSE. At Walwyn Timothy Kingston, manager of the Kingston office, sold 2,582 shares at $4 a share on Nov. 14 and Brian Price, who has left the firm, first bought 4,200 shares at about $4.25 a share on Nov.

4 and then sold 6,561 shares at $4 on Nov. 22. There has been some shake-up in the management structure at Walwyn since the new majority owner, Fairfax Financial Holdings took control Walwyn is trading at about $3.70. Early in the year, Roy Bicknell, president and chief operating officer at Canfor an integrated forest products company, sold 4,000 shares in the open market at an average price of $26.84 $107,350 worth of transactions. Canfor has pulled itself out of the red and turned itself around in the past two years to boast record earnings, reduced debt and an improved cash position.

But on Nov. 10 Bicknell reduced his direct Canfor holdings to nil, selling 400 shares at a reduced price of $25.37. Canfor shares are now trading at about $24. At another British Columbia-based resource company. Chairman Bruce McDonald sold his stake in Golden Knight Resources Inc.

early this year 9,000 shares in the open market at $65s each. About seven months later, Golden Knight started pouring gold from its Golden Pond East mine in the Casa Ber-ardi area of Quebec. Golden Knight holds a 40 stake in the property; Inco Ltd. has 60. Mining entrepreneur McDonald helped finance exploration of the area and generally brought the Casa Berardi to the attention of the mining investment community.

Golden Knight shares are trading at about $8. Pertamina, Indonesia's state oil company, has reported gross profits of 1.54 trillion rupiahs for the year, to March, more than double the 1987 result and the company's best year since it almost bankrupted the country with accumulated debts of billion in 1975. Faisal Abdaoe, Pertamina's president since August, attributed the increase to better crude prices on world markets. But with oil prices now falling, profits this year would probably decline, he said. Pertamina, which like other Indonesian companies does not make public its full accounts, earns most of its estimated billion in revenues from subsidized domestic sales and processing charges at its five refineries.

Pertamina's production activity accounts for only 5 of Indonesia's total output; the lion's share is handled by foreign companies. Indonesia, Asia's only member of the Organization of Petroleum Exporting Countries, is offering a discount off official prices for June to December delivery to its buyers in Japan. Energy Minister Ginandjar Kartasasmita said Indonesia is considering reviving long-term contracts for oil. It could be for one year or six months. The price formula must respond to the market, he said.

Viking profits up Viking Packaging, maker and printer of high-quality polythene and cast polypropylene flexible packaging, announced a 58 increase in pre-tax profits to 1.51 million for the year to Sept. 30 vs a previous 957,000. A final dividend of 2.6 pence (2.34p) is proposed for a total of 3.9p (3.5p). Earnings worked through at 10.4p (6.9p) per 10P share. Chairman Stephen Ellis said the current financial year had started in line with expectations.

While raw materials supply remained restricted, the group was not experiencing supply difficulties. Turnover amounted far 26.7 million (21.01 million) and the pretax result was after interest charges of 548,000 Tax took 521,000 Psion buys Dacom Psion, hand-held computer and software company, is paying an initial 4.5 million for privately owned Dacom Systems, a specialist data communications group. The deal is being financed through the issue of 2.85 million ordinary shares at 145p to raise about 4.1 million, with the balance financed from company resources. Further payments for the acquisition are pegged to the achievement of profit targets during the next five years. Dacom returned pre-tax profits of 598,000 on turnover of 4.65 million during the year to May 31.

Net assets at that date stood at 982,000. This is Psion's first acquisition since joining the USM in March and David Potter, the managing director, said it would help develop the product range by broadening the technology base. Eurofiltec sold Tyzack, the restructured Sheffield-based engineering group, is paying 10.9 million for Eurofiltec, a French filter manufacturer and distributor. j.f.S.u The acquisition is part of Ty- and an international marketing organization has been established to co-ordinate efforts. The papermaking and paper and film converting division lifted trading profits to 6.3 million (5.7 million), despite a machine breakdown at the company's paper mill which will cut production.

That mill has returned to full production and the company was fully insured, the chairman said. The air conditioning, purification and distribution business returned a trading profit of 917,000 (383,000) on a turnover of 5.4 million (4.4 million). The company is paying a total dividend of 8.8p (8p), following a final of 6.05p (5.5p). Earnings per share were 25.8p (22.6p). Exports from Britain continued to increase and represented 31 of group sales but the chairman said the continued growth in sterling was particularly critical for the company.

Against a background of the current economic climate and competitive pressures in the U.S., Rawlinson expressed caution the outlook for the short term. "Nevertheless, I am confident that the investments that we have made and are planning will keep us strongly competitive in the years ahead," he said. Arthur Lee boost Pre-tax profits at Arthur Lee Sons advanced 46 to 6.03 million from 4.13 million in the year to Sept. 30. Chairman Peter Lee said this continued the strong growth trend of the past five years.

Group activity remained high in the new financial year and the order intake remained strong. Turnover at the steel and plastics manufacturer increased 22 to 100.62 million (82.51 million), with steel and related products contributing 89.14 million (74.45 million) and plastics 11.48 million (8.06 million). After tax of 2.06 million (1.3 million), earnings per 12p share were 12.64p (9.1p) and the directors have recommended a final dividend of 3p (2.2p), making a total for the year of 4.25p (3.2p). Lee said the steel division had performed strongly Stakis prospers Stakis, the hotels, leisure, property and health-care group, yesterday reported a 28 increase in pre-tax profits to 24.5 million in the year to Oct. 2, 1988.

Turnover grew to 124.2 million from 114.5 million, while earnings per share advanced by 24 to 7.53p. Managing Director Andros Stakis said the group was now geared up for expansion in every division. Capital expenditure will absorb 50 million this year and will be spent largely on developing chains of hotels and nursing homes. A split of profits showed: hotels and inns at 17.21 million (11.62 million); casinos at 5.77 million (4.45 million); property 3.37 million (2.1 million). The health-care division made a maiden contribution of 307,000.

The company's retreat from the financial services business was reflected in an extraordinary charge of 478,000. Stakis either sold or closed down all its businesses in this, area hear the end of the financial7 year. zack's plan for expansion into the fragmented European filtration market from a British base as a low-cost, technologically advanced producer, directors said. The purchase will be financed through the issue of 3.3 million ordinary shares, of which 1.65 million will be retained by the vendors, as well as a cash payment of 6.9 million. Of this sum 3.9 million is to be paid oo-a deferred basis.

The balance of the share issue will be placed with institutional investors at 118p a share. Eurofiltec made pre-tax profits of 718,000 on sales of 3.6 million during the nine months to Sept. 30, compared with pre-tax profits of 1.9 million on 6.5 million in sales in the proceeding 12 months. Tyzack directors said the decline in profits and sales during the nine months to September was caused by a shortfall in large equipment contracts and lower sales of replacement filters to the power generating industry. Sales are expected to recover, and access to Tyzack's filter range is expected to boost the French group's performance.

Tyzack lifted its share of the European blast equipment market to about 20 earlier this year with the purchase of Gutmann, a West German group, for 811,000 in cash. Pre-tax profits at Tyzack were boosted to 2.71 million during the year to end-July from 540,000, on turnover of 26.9 million (10.7 million Thornton blooms Strong organic growth from its core original businesses enabled GW Thornton Holdings, USM-quoted precision engineer, to lift taxable profits from 1.06 million to 1.25 million in the 12 months to Oct. 1. Turnover rose to 13.88 million (10.44 million). Comparisons were restated on a merger-accounted basis following the purchase of Greenwood Taylor Clark Systems in November 1987.

Earnings-were 13.2p (13p) and a recommended final dividend of 2.5p makes a total of 4.25p (3.75p). API profits held A sharp fall in returns from one of Associated Paper Industries three principal operating areas restrained growth in pre-tax profits to 10.2 during the year to Oct. 1, compared with the previous 53 weeks. During a year in which Chairman Charles Rawlinson said the company encountered a number of challenges, pre-tax profits were 7.5 million (6.8 million) while turnover eased to 87.4 million (88.2 million). Competitive pressures in the world stamping foils business reduced API's trading profits in the the division to 1.8 million from 3 million.

Turnover was down to 21.7 million from 24 million. The problems were most acute in the U.S. foil stamping business because of a decline in demand in some areas of the market. Invest-mehts'have been ihadef fh the U.S; and Britain to increase efficiencies CITY-TV bids second time to launch Ottawa station glish-language station license. The venture likely would cost CHUM about $10 million, Sherratt said.

Yesterday was the deadline for applications. In his address to shareholders, Waters said Capital City would be ambitious but would not threaten television stations in Ottawa. "Capital City will project a genuinely distinctive and different television service," he said. CITY-TV President Moses Znaimer said the Ottawa station would be patterned after the Toronto operation. Capital City would be an altferriaN tive to "middle of the road" stations By Jennifer Lanthier Financial Post TORONTO television station CITY-TV is making a second bid to crack the Ottawa market, CHUM Ltd.

President Allan Waters said yesterday. Waters told shareholders at the CHUM annual meeting that CITY-TV, a subsidiary of Toronto-based CHUM, has filed an application with the Canadian Radio-television Telecommunications Commission to open Capital City TV. Fred Sherratt, CHUM vice-president of programming, said he anticipates from eight other applicants for the En-.