ALUSUISSE SEES POSSIBLE BREAK-EVEN IN 1987
Schweizerische Aluminimum AG <ALUZ.Z>
(Alusuisse) may be able to break even this year after cleansing
its balance sheet for 1986, chief executive Hans Jucker said.
    "The threshold of profitability has returned to the
foreseeable future," he said. "We expect already in 1987
approximately to break even. That presupposes, however, that
our industrial environment does not worsen."
    He said Alusuisse would no longer face the burden of past
losses.
    Alusuisse made a net loss of 688 mln Swiss francs in 1986
after a restated 756 mln loss in 1985.
    Gross sales were 5.93 billion francs after 8.51 billion and
net turnover 5.65 billion after 8.00 billion.
    Alusuisse had originally reported a 692 mln francs loss for
1985.
    But Jucker and Finance Director Hermann Haerri told a news
conference the new management installed a year ago had decided
to restate the previous five years' accounts to eliminate
rights on Australian bauxite previously in the books as an
asset.
    Together with other one-off charges, Alusuisse took an
gross extraordinary charge in 1986 of 698 mln francs, up from
472 mln in 1985.
    It also had 106 mln extraordinary income in 1986 remaining,
after provisions, from the sale of its Maremont Corp subsidiary
in the United States. There were no extraordinary gains in
1985.
    Jucker said the losses, plus those carried forward from
1985, had wiped out the company's remaining reserves and
exceeded legally allowed levels, forcing Alusuisse to adopt a
50 pct capital cut, to be approved by shareholders on April 22.
    Jucker said he knew shareholders would find this "radical
elimination of the mortgages of the past" painful, but said the
foundation had been laid for a successful new company strategy.
    Haerri said despite the losses, the company's liquidity was
strong. Bank debt had been cut by about one-third to 2.56
billion francs against the end-1985 level of 3.85 billion.
    Cash flow improved substantially to 323 mln francs from 111
mln and represented 5.7 pct of turnover against a mere 1.4 pct
in 1985.
    In addition, to reassure other creditors, Alusuisse had
arranged with three major Swiss banks -- Union Bank of
Switzerland <SBGZ.Z>, Swiss Bank Corp <SBVZ.Z> and Credit
Suisse <CRSZ.Z>, to convert 300 mln francs of credits into a
subordinated loan.
    The main sources of losses in 1986 were book losses and not
cash losses, Haerri said. Existing credit lines were used only
to a small extent, and the parent company had been granted a
new credit line of 200 mln francs from a consortium of Swiss
banks that would cover most of the loans falling due in 1987.
    Haerri said the company had been criticized for maintaining
bauxite rights as an asset, and so had restated the accounts.
    That left the 1985 account with a 756 mln franc loss
instead of 692 mln, 1984 with a 68 mln profit instead of 169
mln, 1983 with a 217 mln loss instead of 82 mln and 1982 with a
479 mln loss instead of 179 mln.
    The new accounts show 1985 with shareholders' equity of
1.15 billion francs instead of 1.75 billion, and similar
alternations were made for previous years.
    After 1986 losses, shareholder's equity stood at only 895
mln francs.
 REUTER
