ABB Grain: Solid result despite challenging environment

Adelaide / AU. (abb) Premier Australian agribusiness ABB Grain Limited reported an underlying net profit after tax (NPAT) 30,6 million AUD for the half-year ended 31 March 2009, which is 3,0 million AUD or nine percent down on the previous half-year.

The half year result was adversely affected by the write-down of stock values and losses incurred in the fertiliser business of 9,8 million AUD after tax, due to a significant fall in global fertiliser prices. Before the fertiliser losses, a strong underlying NPAT of 40,5 million AUD was recorded.

After net one-off items of 0,9 million AUD, bottom-line NPAT was 29,7 million AUD. One-off items comprised merger and acquisition costs in relation to the proposed AWB merger, employee termination payments and income tax benefit from a prior year.

ABB announced a fully franked interim dividend of 0,10 AUD per share, to be paid on 30 June 2009, with a record date of 16 June 2009. Managing Director, Michael Iwaniw, said that although the result was not as strong as he would have liked it was solid considering the challenging environment.

The full-year underlying profit expectation has been revised to 53 million AUD to 63 million AUD to reflect first half fertiliser and other losses. This is before expected net one-off items of approximately 6,0 million AUD after tax, principally representing due diligence costs associated with the AWB and Viterra proposals. A full-year result in the above range reflects an improvement in earnings on comparable past low-volume years.

Iwaniw: «The past six months have been extremely challenging for ABB, as they have for many businesses both here and overseas. But we believe we have the capacity to meet those challenges and achieve our financial goals. The volatility of foreign exchange rates, the global financial crisis and its effect in making customers more cautious about purchases; the large fall in global fertiliser prices, coupled with a slightly lower than expected South Australian harvest, have conspired to have a bearing on the result. However, despite these negatives there are many positives to carry into the second half of our reporting year».

Iwaniw said despite receiving only 3,9 million AUD tonnes of grain last harvest in SA, ABB´s supply chain division contributed an 87 percent increase in revenue. This was achieved despite receivals only increasing by nine percent on 2007. «This highlights optimising of ABB´s silo network, continued cost containment and diversification of the division´s operations. Our grain marketing division enjoyed a solid first half-year by selling more grain, including increased Ukrainian and wheat export shipments. We expect Ukraine to provide grain from its upcoming harvest which will enable us to market into international markets in the second-half of the year», Iwaniw said in a press release.

Info: The complete statement is available on ABB´s server.