Alcan Aluminium Limited 1966 Annual Report Contents
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Alcan Aluminium Limited 1966 Annual Report Contents Directors and Officers. ......................... 2 Summary of the Year 1966.. ................... 3 The President's Report. ........................ 4 Review of the Year 1966.. ..................... 10 . Fabr~catmg............................... 10 Smelting ................................. 12 Markets and Sales.. ....................... 18 Capital Expenditure and Financing ......... 22 Research and Development. ................ 23 A Century of Confederation.. ................... 25 Alcan at Expo 67.. ............................. 28 New Alcan Concept in Housing. ................ 28 Financial Statements. .......................... 32 Subsidiaries and Affiliates. ..................... 41 The Annual Meeting of the shareholders of Alcan Alu- minium Limited will be held on Thursday, 27 April 1967, at I I a.m. in Place Ville Marie, Montreal. On pourra se procurer le texte fran~aisde ce rapport annuel en s'adressant au secretariat de la Compagnie, case postale 6090, Montrkal 3, Canada. Alcan Aluminium Limited 1 Place Ville Marie, Montreal 3, Canada Mail: Box 6090 ii ~ebe;enlat!onai oniv since the oficral ~roporlionsof figs may vary cbnsiderabiy in various countries. TERMS in this report, ail amounts are in Canadian dollars and ail quan- titjes are in short tons of2,OOO pounds each, unless otherwise stated. The term "Aican" refers to the parent Aican Aluminium Limited itseil. or to one or more subsidiary companies as indicatedby the context. Directors Officers FIF1.D-hlARSHAL .I HF RT. 110S. THC CARI. NATHANAEL V. DAVlS ALEX,\UDCR 01. TUNIS, KC., London President DANA T. BARTHOLOMEW, Montreal DANA T. BARTHOLOMEW Vice President of Alcan Aluminium Limited Vice President and Chief Financial Officer FRASER W. BRUCE, Montreal FRASER W. BRUCE President of Aluminum Company of Canada, Ltd Vice President DR. DONALD K. DAVID, Osterville, Massachusetts PAULLAROQUE Former Vice Chairman of the Board of Ford Foundation Vice President, Secretary and Legal Officer NATHANAEL V. DAVIS, Montreal M. P. WElGEL President of Alcan Aluminium Limited Vice President and Chief Operations Officer JAMES A. DULLEA, Westport, Connecticut DAVID M. CULVER Consultant to Alcan Aluminium Limited Chief Sales Officer N. BAXTER JACKSON, New York HOLBROOK R. DAVIS Chairman of International Advisory Board, Chief Employee Relations Officer Chemical Bank New York Trust Company 1. F. EVANS PAUL LAROQUE, Montrea! Chief Administrative Officer Vice President of Alcan Alummium Limited I. F. HORWOOD R. E. POWELL, Montreal Chief Technical Officer Honoraly Chairman of Aluminum Company of Canada, Ltd D. M. KERTLAND H. H. RICHARDSON, Montreal Treasurer and Accounting Officer Consultant to Alcan Aluminium Limited DUNCAN C. CAMPBELL HON. JAMES SINCLAIR, PC., Vancouver Public Relations Officer Chairman of Lafarge Cement of North America Ltd K. C. BALA M. B. de SOUSA PERNES, Geneva Assistant Secretary President of Alcan Aluminium S.A. A. A. BRUNEAU JOHN L. SULLIVAN, Washington Assistant Secretary Attorney, Sullivan, Shea and Kenney W. B. FINDLAY M. P. WEIGEL, Montreal Assistant Secretary Vice President of Alcan Aluminium Limited W. E. F. JOHNSON Assistant Treasurer EDWIN I. MEJIA, San Francisco Honorary Director; Consultant to Alcan Aluminium Limited Summary of the Year 1966 year ending 31st December RESULTS 1966 1965 Sales and operating revenues ............................ 998.3 million $ 890.3 million Depreciation and deferred income taxes ....................... 83.3 million 74.4 million Income before income taxes ............................ 144.7 million 128.9 million Net income .................................... 77.7 million. 62.4 million Alcan Aluminium Limited preferred dividends .................... 2.6 million 2.6 million Profit per common share (after preferred dividends) ................. 2.41 1.93 Common dividends per share ............................ (US.) 0.925 (US.) 0.825 RELATED STATISTICS Additions to plant and investments ......................... 122.2 million 143.3 million Sales of aluminum products (tons) ......................... 1,I 15,471 993.115 31st December BALANCE SHEET ITEMS 1966 1965 Net current assets ................................. $ 332.1 million $ 330.9 million Land, plants and facilities (net) ........................... 1.068.9 million 1.024.0 million Debt not maturing within one year ......................... 578.7 million 587.4 million Common shareholders' equity ........................... 624.0 million 566.1 million Book value per common share ........................... 20.04 18.21 31st December SHAREHOLDERS 1966 1965 Number of preferred shareholders according to share register ............ 6.886 6,202 Number of common shareholders according to share register ............. 56.689 52.409 Residents of Canada .............................. 29,308 25,610 Residents of U.S.A. .............................. 25,416 24.762 Residents of other countries .......................... 1,965 2,037 Percentage of common shares held By residents of Canada ............................. By residents of USA ............................. By residents of other countries ......................... EMPLOYEES Number of employees supplies from several geographic areas, and there was an important clarification of the legal position arising from the acquisition in 1965 of certain fabricating facilities in the United States. Another important development was an agreement con- I cluded with the Kingdom of Norway, under which Alcan has entered a full partnership with the Norwegian Government in the largest aluminum producer in Norway and one of the largest in Europe - A/S Ardal og Sunndal Verk. The impact of these new developments - all of which are more fully described elsewhere in this report - places the Company in a stronger and better balanced position Report to the Shareholders to meet and benefit from future opportunities. The year's results in brief were: Another year of strong 1demand for aluminum products NET INCOME of Alcan Aluminium Limited consolidated in most world markets, particularly in North America, after all charges, including dividends on preferred shares provided the basis for greatly improved results. With new of subsidiaries, was $77.7 million in 1966 as compared high levels of sales and improved prices, 1966 proved to with $62.4 million for the year 1965. be the best profit year in Alcan's history. In many other respects also the year was an eventful EARNrNGs for the common shares (after allowing for one. The tonnage of sales of semi-fabricated and finished dividends on the Company's preferred shares) were products came close to equalling the tonnage of sales in $2.41 per share on the 31,137,066 outstanding shares as primary form. The total dollar sales and operating compared with $1.93 per share (after a 17-cent non- revenues fell just short of the billion dollar level. The recurring charge) on the 31,086,642 shares outstanding approach to these milestones is largely the outgrowth at the end of 1965. of the many new or expanded fabricating projects under- CONSOLIDATED SALES of aluminum at 1,115,500 tons taken on a broad geographic front over the past several again set a new record, over 12 percent larger than years. the 993,100 tons sold in 1965. For Alcan, the year 1966 brought a steady rise in the SALES AND OPERATING REVENUES were $998 million com- operating rates of its aluminum smelters in Canada, with . pared with $890 million in 1965. After deducting "cost ' the prospect of virtually full utilization of all the Com- of sales and operating expenses" there remained $329 pany's Canadian assets in 1967. Significant steps were million of gross profit before depreciation compared taken towards broadening the base of raw material with $301 million in 1965. 4 INCOME TAX provision on earnings of the consolidated 1967 the planned larger output of "full profit" metal from companies was $62.9 million, compared with $60.3 Alcan's own smelters will supplant some of the metal million in 1965. purchases made in 1966, and realized prices should in- crease somewhat as a result of the price change which CASH GENERATION consisting of net income, depreciation, and deferred taxes was $161 million or $5.17 per share occurred in North America in January 1967. compared with $137 million or $4.40 per share in 1965. Primary Production Cash generation was further augmented by a gain of $12 Total primary aluminum produced by all the companies million on the sale of copper conductor. associated with Alcan, including the production of non- 'COMMON DIVIDEND payments were at a quarterly rate consolidated affiliates and ingot received in exchange of US. 22.5 cents per share for the first three quarters for alumina. amounted to 1.136,000. tons in 1966. of 1966 but in the fourth quarter were increased to The Alcan smelters in Canada produced 788,500 tons of US. 25 cents per share. Total common dividend dis- aluminum, with the output rising from an annual rate of bursements, expressed in Canadian dollars, were $31.0 770,000 tons early in 1966 to a rate of 847,000 tons by million representing an average of $1.00 per share, the end of the year. The increase arose from a new compared with $27.6 million in 1965, an average of potline of 24,000 tons per annum capacity brought into 89 cents per share. service at Kitimat in May, and from additional capacity PLANT AND INVESTMENT outlays were $122 million. derived from the modernization of some of the Com- pany's older smelters in Quebec and British Columbia. Sales and Prices Further