Council firms lose $300,000 in six months

Ruapehu Bulletin, Volume 14, Issue 677, 11 March 1997, Page 1

Council firms lose $300,000 in six months

Timetabling of road works, major restructuring, the loss of a major contract, extraordinary mainteI nance and stiff price competition for road I metal have been blamed for losses of over I $300,000 for the Ruapehu District CounI cil's two companies for the six months to I 31 December 1996. Ruapehu mayor, Weston Kirton last I week announced the results of the operaI tions of Ruapehu Construction Limited I (RCL) and Ruapehu Quarries Limited I (RQL) for the six-month period. RCL had ■ recorded an operating loss of $296,468 I and RQL an operating loss of $29,426. ■ Mr Kirton said the half yearly result ■ demonstrates the high risk in the construcItion company industry as in some years Hgood profits can be achieved whereas in Hother years losses can result.

He said reasons for the losses were: • The first six months of the year alwaysproduced the worst figures as the bulk of the contracting season fell in the second six month period. • RCL had been through a major period of restructuring including the loss of a major operating contract which resulted in redundancies. • Extraordinary maintenance has been carried out at the metal crusher which will be "non-recurring for several years". • Metal prices have been fiercely competitive over the trading period and whilst this has helped the Council in reducing the cost of contracts it has reduced trading profitability. He said they envisage that there will be a marked turnaround before the end of the Turn to Page 2