THE CUBA REVIEW 



ing to about £26,000, was set aside to reserve and renewals. Very much better results 

 have been secured in the past twelve months, and the directors may be in a position not 

 only to raise the dividend to 4 per cent, but to allocate a substantially larger sum to 

 the reserve funds than in 1911-12. The increase in traffic receipts, according to the 

 weekly returns, was as much as ill4,000, or nearly 23 per cent, and the total of the 

 gross earnings, including sundry receipts, has thus been raised to the record figure of 

 £614,000. What proportion of this growth in earnings will be added to net revenue ac- 

 count remains to be seen. In the last two or three years a policy of improvement has 

 been in evidence, and a good deal of money (both capital and revenue) has been spent on 

 rene.wals anti betterments in order to secure greater economy of operation. These outlays 

 are already bearing fruit, and, whilst the cost of maintenance is likely to remain relatively 

 heavy for a time, a reduction in transportation expenses is to be looked for, and a further 

 decline in the ratio of the total expenses to receipts may be anticipated. If we assume 

 that one-half last year's expansion in earnings has been absorbed by increased expenditure 

 (which means an addition of as much as £57,000 to the cost of working), the ratio of 

 expenses to receipts would be lowered from 58.78 to 57.16 per cent, a not unreasonable 

 assumption, having regard to the improved physical condition of the property. The net 

 earnings may thus show an improvement of £57,000, or 27.6 per cent. On the other 

 hand, interest charges will require something like £20,000 more than in 1911-12, owing to 

 the issue last year of an additional £350,000 Five Per Cent Debenture stock, and on 

 balance the gain in profit may be about £37,000. This is sufficient to provide an extra 

 4 per cent on the share capital, and the total estimated profit for the year, amounting to 

 £80,000, may thus be equal to a dividend of something like 9 per cent. As it requires only 

 £36,000 to pay 4 per cent on the Ordinary, it is evident that such a distribution could be 

 made without any departure from the usual conservative policy of the board, and that. 

 in addition, a much larger sum could be devoted to reserve and other purposes than in 

 previous years. 



In the following table are given the estimated figures in respect to the past twelve 

 months as outlined above, and for comparative purposes the actual earnings and profits 

 for the three preceding years : 



INCOME PTATE.MEXT CUB.\.\ CENTRAL RAILWAYS 



1912-13* 1911-12 1910-11 1909-10 



Gross earnings £614,000 £499,982 £460,086 £465,310 



Expenses 351,000 293,900 281,288 282,686 



Ratio (57.16) (58.78) (61.14) (60.75) 



Net earnings 263,000 206,082 178,798 182,624 



Miscellaneous 2,000 1,670 1,834 2,639 



Net income 265,000 207,752 180,632 185,263 



Rent-charges 9,000 9,304 9,927 10,516 



4 V- per cent Debentures 48,000 47,740 45,955 44,000 



6 per cent 2nd Debentures 1,742 12,000 12,000 



5 per cent Debenture Stock 45,000 23,015 



Taxes and miscellaneous 17,000 16,406 14,774 12,877 



Total charges 119,000 99,207 82,656 79,393 



Net profit 145,000 109,545 97,976 105,870 



5 VL' per cent Pref. dividend 66,000 66,000 66,000 66,000 



Profit for Ordinary 80,000 43,545 31,976 39,870 



Ordinary dividend 36,000 18,000 18,000 18,000 



Rate per cent (4p. c.) (2p. c.) (2p. c.) (2 p. c.) 



Surplus 44,000 25,545 13,976 21,870 



Special renewals, etc 24,000 21,000 9,000 10,000 



Reserve 20,000 5,000 5,000 10,000 



Total funds 44,000 26,000 14,000 20,000 



Balance Dr. 455 Dr. 24 Cr. 1,870 



Brought forward 10,000 10,963 10,987 9,117 



Carried forward 10,000 ]0,.508 10,963 10,987 



* Estimated. 



The London Stock lixcliange Gazette reminds its readers that "the system is mainly 

 dependent upon sugar for its revenue, and the fact that its sources of income are so 

 restricted renders its fortunes liable to very sharp ups and downs. At present it is on 

 the cre.st of a wave of prosperity, and this may possibly continue for some time, but 

 eventually, of course, some reaction is inevitable." 



The I'inancial Times says the annual report due in October "can I'.-irdly fail to be of an 

 unusrally satisfactory character because of its earnings." 



