THE CUBA REVIEW 



19 



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



Gross earnines £617,603 £499,982 £640,086 £465,310 



Expenses 352,689 293,900 281,288 282,686 



Ratio (57.11) (58.78) (61.14) (60.75) 



Net earnings 264,914 206,082 178,798 182,624 



Miscellaneous 1,996 1,670 1,834 2,639 



Net income 266,910 207,752 180,632 185,263 



Rent charges 8,639 9,304 9,927 10,516 



K7c debentures 48,295 47,740 45,955 44,000 



6% 2d debentures 1,742 12,000 12,000 



5% debenture stock 45,000 23,015 



Taxes and mi.scellaneous 22,101 16,406 14,774 12,877 



Total charges 124,035 99,207 82,656 79,393 



Net profit 142,875 109.545 97,976 105,870 



53^% preferred dividend 66,000 66,000 66,000 66,000 



Profit for ordinary 76,875 43,545 31,976 39,870 



Ordinary dividend 27,000 18,000 18,000 18,000 



Rate per cent (3%) (2%) (29o) (2%) 



Surphis 49,875 25,545 13,976 21,870 



Special renewals, etc 37,000 21,000 9,000 10,000 



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



Total funds 47,000 26,000 14,000 20,000 



Balance Cr. 2,875 Dr.455 Dr. 24 Cr. 1,870 



Brought for^vard 10,508 10,963 10,987 9,117 



Carried forward 13,383 10,508 10,963 10,987 



The recent offer by the United Ralways of the Havana Company to acquire the share capital 

 of the Cuban Central on the basis of an exchange of shares has resulted in that company 

 obtaining control of the Central Railway. This alliance is of considerabble importance to both 

 concerns, and particularly to the Cuban Central, whose interests being more cu'cumscribed 

 than those of the larger companj', stands to gi-eatly benefit by the fusion. As Sir William 

 Young pointed out at the time the matter was under discussion, the greater diversity of traffic 

 which the United Company possesses, must of itself add considerably to the strength of the 

 Cuban Central, inasmuch as the risk of a serious falling off in earnings, which would result 

 from a partial failure of the sugar crop in any year is, to a large extent, eliminated by the 

 consolidation of interests with a company which is less dependent upon one item of traffic. 

 Moreover, the taking over of the line will undoubtedly mean considerable economies in officers, 

 and will at the same time insure a better and more continuous use being made of the rolling 

 stock; for, being a crop line and requiring a large amount of rolling stock at a given time in 

 order to dispose of its products quickly, a considerable amount of capital necessarity remains 

 idle for the greater portion of the year, which, under the new conditions, will not occur, at any 

 rate, to the same extent. 



The position of the company, allied to the United Railways, is therefore very much better 

 than when woi'king as an independent corporation, and the fusion certainly enhances the 

 intrinsic value of its securities. The debenture issues may be regarded as relatively safe 

 investments, the total fixed charges representing about 46 per cent, of last year's net income. 

 The 43^ per cent, mortgage debentures have now ri.sen to par; and, allowing for accrued 

 interest, a yield of about £4 lis. 6d. per cent, is forthcoming. They are redeemable at par 

 by the operation of a sinking fund of 1 per cent, per annum, and the company has power to 

 retire the whole amount at 110 per cent, on giving six months' notice. The 5 per cent, debenture 

 stock is quoted at 97, and the yield afforded is £5 5s. 6d. per cent. The stock is redeemable 

 at 110 per cent, at any time on six months' notice, and is consequently a sound investment, 

 giving a relatively high return. The £10 5H per cent, preference shares can be bought at 

 9M, whilst the ordinary shares are quoted at 6. 



The capital of the company is as follows: 



Amount Interest Yield 



4H per cent, mortgage debentures £798,600 4^% £4 lis. 6d. 



5 per cent, debentiue stock 1,178,000 5 % £5 5s. 6d. 



5^per cent, cumulative preference shares. .. . 1,200,000 5J^% £5 13s. 5d. 



Ordinary shares 900,000 3 % £5 Os. lOd. 



Total £4,076,600 



