Suez Canal Company

Company Meeting Suez Canal Company GREAT INTERNATIONAL SERVICE MAINTAINED THROUGHOUT CRISIS CURRENT TRAFFIC OUTLOOK M. Francois Charles-Roux ona Creditahle Achievement The annual general meeting of the Suez Canal Co., was held in Paris recently. M. Francois Charles-Roux, the president, in the course of his speech said: The proposals made to you regarding the distribution of the profits for 1951 are exactly in conformity with the policy outlined to you a year ago at your last general meeting. We told you that we should endeavour to keep the dividend at the level to which it had then been brought. Today we propose an appreciable imerease in the amount as a result of the inerease in Egyptian tax. We also told you that, as was ont eustom, we would keep your future interests well in mind, and that with this object in view we your company’s to allocate thereto frances, and this without none the specifiealy earmarked would continue to build up extraordinary reserves. We propose an amount of 2,000 million prejudice to smaller, but less substantialallotments to other more funds. We also think, and you will no doubt agree, that in these times it is ad- visable that your company should have at its disposal a reasonably enlarged extra ordinary reserve. The results for 1951 have come up to and even slight- ly exceeded the forecasts we made last June. The position would be even bet- ter for you if it had not been for the inerease in Egyptian tax. This increase ean only bring once more to the fore the question of the double taxation on your shares, in France, and in Egypt. Therefore, while continuing our discussions with the French Ministry of Finance, we have also writ- ten on the subject to the Quai d’Orsay. Political Conflict Tt seems to us, therefore, that the report presented to you is not devoid of factors which in- spire confidence, It remains for me to pick out one, which is by no means, the least, and that is the way in which your company has fared up to a political situation to which it was in no way a jparty, hut of which both the canal and the company suffered the reper- cussions. A conflict which did not al- aways remain — and far from it — within the peaceful realm of diplomacy, turned the Canal Yane into a scene of small-scale mititary operations. The struggle that took place there encouraged agitation which led tu public disturbances. On the Egyptian side, this bitter dis- pute took the form, among others, of a strike of labour nore or less essential to the normal life of Port Said and the Canal. Port Said was para- lysed for about four months by the simultaneous strike of dock- ers, of mooring-boat men and of electricians employed by the firms hiring out searchlights for night transit. During three days, on Jan. 8, 9 and 10, 1952, your company had to face the possibility of a general strike among its own labour force in all trades. a strike which was foreshadowed by stoppages of work lasting some hours, Cer- tiin measures or formulae. such as blaek-listing of vessels and coltaboration with the enemy, were such as to give rise to the fear of interference with or opposition to the free pussage of vessels of all flags. There was rioting in Ismailia in Nov- ember, 1961, and in Suez on Jan. 4, 1952. Real battles took place in Suez and Ismailia in January this year and on two occasions in the latler town. on Jan. 19 and 26, went on for no less than half a day. These were more than mere scuffles. At times it happened that the daily communications between your offices in the Isthmus and vour Agence Supérieure in Cairo were cut as a result of skir- mishes follawed by mopping up operations ou the read between Cairo and Ismailia. The move- ments of your pilots by car on the read along the Canal, when returning home after piloting ships, became unsafe and the pilots had te be areompanied by police. Tribute to Personnel Such are the conditions under which your conypany ensured the transit of a record number of ships through the canal du- ring this period of crisis and succeedad in avoiding interrup- tions in traffic except on very rare occasions and then only for 1 few hours. I feel that this tloeg great credit to the con- scientiousness, coolness and tact of your personne] in Egypt. to their pluck and the pluck of their wives and children. An Honourable Voluntary Service I mentioned to you. in my address last year that your com- pany was striving fo be the most useful. screen between Feypt and the general interests centred an the Suez Canal. This is what it was during this troubled period of the winter 1951-52, during which it kept the canal working though 37 per cent. of its traffic sails under the British flag, while the events I have briefly described to you were taking place on its banks. The company thus did what would have been difficult for the Egyptian Government to do of its own accord and what would have been dama- ging to ft not to do, So it seems to me that your company has written a page of its history which tn no way imirs its annals and which in no way detracts — and this is the least that can be said — from the consideration It needs to discharge the great internation- al service it provides. gross amount the only one it lies with us to decide, and this will enable you to recover in part the Joss you have to bear on the net Two Interests One last remark is worth waking. Circumstances hare jaid particular emphasis on two interest. One is the international interest in the canal, that is te say the desirability of unin- terruped and regular traffic for all nations using this water- way. The other is the interest of Egypt and of the Egyptian Government not te incur the responsibility of Interrupting traffic. These two interests tally with one another and with that of your company. They combine to make it desirable as umuch for the nrany users of the canal as for the conceding Power «and the concessionary company itself that traffic be wuarded against all possibilities of stoppage, interruption or im- pediment. Directors’ Report The following are extracts from the directors’ report :— The financial year 1951 re- corded a pause, as it were, in the upward trend, which had heen continuous since the end of the war, in your company’s receipts, seeing that in 1951 these were within 1.4 per cent. of the previous years’ figure. It is remarkable that the fall- ing-off was so small, consider- ing the events which affected the operation of the cunul du- ring the past year. As you were informed last year, we considered the time had arrived to implement once more the company’s traditional policy, and a reduction in dues Was put into force as from Sept. 15, 1951. Increased Dividend Sneh are the circumstances which could have brought about a considerable reduction in the x results, but for the com- yea pensation derived from the ge- neral increase in traffic, As it does not appear necessary this year to effect such hurge allot- ments from profits as lat year, chiefly owing to the advanced stage of the seventh pro- gramme, we are uble to propose to you not only the mainteu- anee of, bur a slight increase in, the ss dividend. Finally, it is appropriate to stress the fact that the events which took place in Hgypt and more especially in the Isthmus of Suez during the last quarter of 1951 and the first months of 1952, caused no interference with traffic beyond some delays due to the reduction in the num- ber of the daily convoys. This resnit was only achieved through the unfailing devotion, coolness and courage shown by all grades of your company’s personnel throughout the diffi- eult circumstances which were a feature of the Anglo-Fgyptlan crisis. Dredging in the canal in 1951 by the company and under cont- ruct amounted to 9,925,000 cubic nretres, The execution uf the seventh programme continued according to schedule with the improve. ments to the ovter harbeur and Hussein Basin, and the const- ruction of the fishing fleet har. bour at Port Said, Dredging Operations The deepening of the canal by 20 inches went on during 1951 a distance of approxi- mutely 12 miles was dredged to the new depth. The normal maintenance dredging opera- tions were in the main concent- rated on the roadstead of Port Suid. where the new suction dredger Paul Solente proved herself exceedingly efficient. The upkeep of the canal hank revetinents eantinues to present a particewarly aeute problem, due to the accentuated erosian resulting from the increase in traffic. Farouk Canal was put into service on July 23. This by-pass is used by vessels from the south, which transit without having to make fast, while con- vors from the north continue to use the main cunwl. The new canal, which ensures transit in improved conditions of safety was found to be particularly useful during the troubled ipe- riod of last winter. Compensating Influence Between World Trade — The year 1951 provides yet another example of the com- pensating influences which sometimes omerate between the different currents of world trade. As we have seen, two factors could have reduced the volume of traffic: the opening of the Transarabian pipeline, which deprived the canal of some 14,100,000 tons of crude oil, and, secondly, the cessation of production at the Persian oil wells and the closing of the Abadan refinery. The effect of these two factors was compen- sited by the scaring production of erude oil in the Persian Gulf countries ether than Iran, and by a new feature consisting in the export from Europe of large quantities of refined petroleum products to ports east of Suez, to replace supplies previously originating from the Apbadamn refinery. Moresver, there wag 4 considerable inerease in the tarriuge of goods other than petroleum products, in beth di- rections The fuer that the net tounge of trausitting vessels, at 80,356,000 tops, and the number of transits, at 11.604, show only a slight re- duction, net more than 1.8 per cent. compared with the pre- vious year, is attributable fo these two faveurable factors, Cargo carried through the canal reached the record figure of 76,758,000 tons weight, an in- crease of 4,144,000 tons — that ix, 5.7 per cent. 'rhe increase in fhe tonnage of yoods was due entirely to southbound traffic, which totalled 17,420,000 tons, shoav- ing over 1950 a remarkable in- crease of 43.5 per cent. attained vhiefly in the second half of the year. Practically all the goods com- posing this traffic contributed to the increase, in particular, petroleum products and cereals. The inerease in petroleum products from north ro south during the second half of the year, consequent on the closing of the Abadan refinery at the end of July, resulted in an in- crease of 1,820,000 tons, bring- ing this traffic to the unprece- (Continued ou Page 2) NEWS ? Suez Canal Company (Continued from Page 1) dented figure of 1931,000 tons. Cereals, which had drepped in 1950, invreased in 1951, par- tcularly as a result of ship. ments from the United States io India which are expected to continue in 1952. Finally, metal manufactures, which tradition- ally constituted the principal element of this south-bound traffic, were only third in im- portance and showed a reduc- tion of 3.8 per cent which was incidentally, largely commpensa- ted by the increase in consign. nents of machinery. Goods carried by north-abound vesse at 69,338,000 tons, showed a reduction of 1,135,000 tons, 1.9 per cent., entirely attri- butable to petroleum products. The prospects with regard to traffie during the current year appear encouraging both for petroleum products and for other commodities. There is reason to believe that, unless the Abadan refi- nery is reopened in the near future, the figure reached br southbound oil traffic in the second half of 1951 will not be the maximum, for it seems that the loss of refined petroleum products from Tersia is still heing keenly felt in the Kast. With regard to crude oil, fur- ther increases of production in countries east. of Suez seem probable, particularly in view of the opening of the Zubair field which bas already been connected by pipeline to the Persian Gulf. It is true that the new pipeline from Iraq to the Mediterranean, with a net annual carrying capacity of 14,000,000 tons was pul into opernfion a few weeks ago but thanks to the increase in can- sumption it dees not seem that this pipeline will cause any great redaction of the north- bound crude oil traffie through tle canal. The Outlook It is not easy to analyse the trends of trade currents other tian oil traffic, as these are much legs clear. First of -tL, with regard te the basie fod products, wheat and oii seeds, we have witnessed for some years the resurgence of exports towards the west. Production indices for 1952 in the Far East being relatively favourable for wheat and for oil seeds, this traffic shonld be sustained du- ring the current year. Except for unforeseeable cir- cumstances if may be hoped, that. on the whole traffie in 1952 will reach a. level at Jeast comparable with that of the preceding year. The Year's Results Reveipts for 1951 amounted to Frs.27,638,623,806, a reduc- tien of Frs.386,662,424 compar- ed owith previous yeur. the avhereas expenses, which total- led Frs.12,821,158,910 were high- er by F'rs.2,115/663,.980, After deduction of interest on, and umortisatigh of, capital ameunt- ing te Firs.1,162,612,088, there remiins available a prefir of F'rs.13,650,852,813. Transit receipts fel) by only 1.8 per cent. compared with the preceding financial] year satisfactory result considering the factors already referred fo. The result of the reduction in transit, dues was that from Sept. 15, 1951, leaded ships paid PT. 36.5 instead of P.T. 39 per ton, and ships in balla paid PLT. 1 instead oof PLT. 19.5 per ton. «Charges sucialess increased by Frs.057,472,911, i.e. per cent. compared with the pre- ceding year. This was due to three causes. Firstly, tases, ex- pecially in Eyypt. increased by approximately 441 inition francs, in line with the increase in taxahle profits in 1951 and owing ta the heavier rates of yarfous taxes, Secandly, the payment to the Egyptian Gov- erninent. caleulated at 7 per cent. of the previous year's gross profits, was approxi- mately 245 mitlion frawes high- er as a result of the inerease in profits for 1050 over 1949. Finally, allotments in respect of pension payments were increas- ed by upproximately 287 mil- lion frances as a result of an offer made by the company to its pensioners fast yeur, to com- mute part of their pensions for a cupital sua. Working expenses rose, during 1961, by Frs.1,158.191,060 16 per cent. under the influence of three different factors. On the one band, prices in TMM. particularly Hgypt, brought in its wake increase in the cost of supplies and the necessity of adjusting expenditure on salaries and wages. On the other hand, work on the seventh programme of fmprovenients involved an in- nem ff 27 nt ee — oe eee oie ¥ the geveral rise in in an crease in the cost of upkeep of and works department plant equipment. Finally, tra which remains at a high level and has further expanded sinve the 1} quarter of 1951, has nec tated some extra staff and naturally imvelves extra maintenance work which be- comes more extensive with the increase in nuinher and dimen- sions of ships. Interest on and iwmortisation of capital, which accounted for Frs.1 352,612,083, remained prac- tically the same as for the pre- viaus year. To the available balunee of Frs.18,659,852,813 is to he added the halance brought forward fram the previous year [rs. 62,240,004, waking a total of Frs.13,722.008,717, on the distri- bution of which yeu will have to decitte. Allocations - From this total it is proposed that allotments should he made of Frs.900 millon to the provi- sion for depreciation and re- newal of plant, and Frs. 300 mil- lion io the provision for depre- ciation of buildings. Tt ig also suggested that an allocation of Frs.2000 million be made to extraordinary re- serve and Frs.300 million to the ussurance aud contingencies fund. This will bring the tetal reserves to a level more in line with the magnitude of the com- pany'’s operations, After deduction uf the above- mentioned alletments, there will remain available au amount of Ers.10,222,008,717. The propesed distribution will account for Frs.10,140,845.070, leaving a balance of Frs.$1,248.447, which it is suggested should again he arried forwar ‘The total er dividend will thus he Bes.9000, to which will he added, der capital shares, the statutory interest for 1951 nmounting to Prs.1420. The full report, in French. will be sent oon atplicution to the Suez Canal Company, 6. Bishepssate. London, E..2. epee ee ee a