East Kemptville write-off spells profit drop for Rio

Profit took a 20% drop this year for Rio Algom Ltd., due to its write- off of the East Kemptvillte tin project.

For the year ended Dec 31, Rio posted a final consolidated profit of $70.2 million or $1.58 per common share compared with $88.3 million or $2 per share in the year earlier period.

The writeoff in the East Kemptville tin project in last year’s fourth quarter resulted in a extraordinary charge of $19.7 million. Without this writeoff, consolidated profit would be $89.9 million.

Consolidated revenues for 1986 increased by 11% to $1.358 billion compared with $1.227 billion in the previous year.

Uranium operations made the largest contribution to company profits followed by Lornex Mining Corp. in which Rio has a 68.1% stake.

The steel manufacturing business returned to profitability in 1986 largely due to the improved performance of the Atlas Stainless Steels division.

A loss was incurred by Potash Co. of America, 87.8% controlled by Rio, primarily due to low selling prices and low demand for potash fertilizer. Revenue from the metal distribution business, however, was lower than in 1985 but operating profit was lower.