16 



THE CUBA REVIEW 



LONDON OPINION ON CUBAN INVESTMENTS 



CUBA COMPANY SHARES PROVE ATTRACTIVE INVESTMENT PROSPECTS 



OF CUBAN RAILWAYS 



THE CUBA company's NEW ISSUE 



[From the Investors' Review, London] 

 An issue of $2,500,000 7 per cent, cumu- 

 lative preferred stock in $100 shares has 

 just been made by this company, of which 

 5,468 shares were subscribed in New York 

 and 19,532 were offered for sale here by 

 Messrs. Robert Fleming & Co. at 104 per 

 cent New York terms, or £21 7s. 6d. per 

 share. According to the information su- 

 plied by the president the company owns 

 the whole of the common stock of the 

 Cuba Railroad, about 300,000 acres of se- 

 lected lands in Cuba, with sugar mills and 

 plantations in the provinces of Camaguey 

 and Oriente, and various town sites on 

 the line of the railroad. The total author- 

 ized amount of the preferred stock $8,- 



000,000, of which $4,000,000 is set aside 



for the redemption of 6 per cent, deben- 

 tures, and $1,500,000 is held in reserve. Of 



the present issue $1,200,000 is to provide 



for the repayment of notes issued for the 



Jobabo mill, $700,000 for doubling that 



mill, and the balance for working capital. 



Surplus earnings of the Cuba Railroad 



have increased from $322,089 for the year 



ended June 30, 1910, to $509,862 for 1911- 



12, and in ivxay last it paid its first divi- 

 dend on the common stock of 4 per cent, 



while for the year just ended the surplus 



is estimated at $750,000. The Cuba Co.'s 



own record is more erratic, a deficit of 



$24,721 in 1910-11 having been followed by 



a profit of $395,463 the following year, 



and one of 4J245,00O for the past 12 months. 



Apart from the common stock of the Rail- 

 road Co., the value of the properties 



owned is estimated to be fully equal to 



the issued debentures and capital stock, 



amounting to $14,500,000, and the present 



issue therefore should be amply covered. 



It is redeemable as a whole after three 



years from date of latest issue at 115 



per cent and accrued interest at the com- 

 pany's option on six months' notice. 



CUBA COMPANY SHARES ATTRACTIVE 



Regarding the new issue of the Cuba 

 Company, London Opinion has the follow- 

 ing to say : 



"The flood of new issues has ceased, but 

 among the few which are appearing are one 

 or two attractive ones. The 7 per cent 

 Cumulative Preference Shares of the Cuba 

 Company, list for which opened and closed 

 yesterday, are rather attractive as the earn- 

 ings of the Company, after payment of all 

 prior charges, amount at present to about 



,000, whereas the amount required for 

 the dividend on the preference shares now 

 issued is only $175,000. The Cuba Company 

 has a large and varied stake in that most 

 prosperous island, for it possesses the en- 

 tire Common Stock of the Cuba Railroad 

 Company, about 300,000 acres of selected 

 lands, numerous valuable town sites includ- 

 ing the City of Antilla, and extensive sugar 

 mills and plantations. At the issue price of 

 104 per cent these shares yield about 6% 

 per cent." 



CUBAN RAILWAY PROSPECTS 



[From the London Outlook] 



Several weeks must elapse before the di- 

 rectors of the United of Havana and the 

 Cuban Central, the two railways operating 

 in Cuba in which the British investor is 

 most interested, publish the results for the 

 financial year which ended on the 30th of 

 last month. But the market is already talk- 

 ing about the dividends, and we propose to 

 note carefully the dividend outlook. It 

 may be said at once that the market es- 

 timates that there will be an increase from 

 4% to 5 per cent in the United of Havana 

 dividend and an increase from 2 to 3 per- 

 cent in that of the Cuban Central. 



Now as to the position. Let us take the 

 United of Havana first. The company dur- 

 ing the past year benefited largely from a 

 record sugar crop, and through its sub- 

 sidiary, the v/estern of Havana, from a fine 

 tobacco crop. The latter part of the sys- 

 tem has, of course, another wonderful crop 

 now being carried. But as regards the last 

 financial year, it was the splendid sugar 

 season that was mainly responsible for its 

 gross increase for the year of £306,000, 

 though the general traffic is steadilv in- 

 creasing. If the ratio of expenses to re- 

 ceipts is much the same as last year the 

 company should save from £90,000 to 

 £100,000 in "net," and as 1 per cent, for 

 the year on United of Havana ordinary 

 represents rather less than £60,000, it is 

 evident that fully 6 per cent, could be paid 

 if the directors wished, and probably in 

 the iDad old days of high dividends and 

 improvident finance it would have been 

 paid. But times have changed and the 

 company is now very conservatively and 

 prudently managed. Last year large sums 

 were put into the road and no less than 

 £125,000 was placed to reserves and re- 

 newals. There seems to be little doubt 

 that even larger special appropriations will 

 be made this year, and shareholders may 

 take it for granted that if the dividend is 



