AWB Announces Strong Half Yearly Results

Submitted by Craig Strzelecki on 22 May, 2008 - 11:19

AWB posted strong half- yearly results yesterday. It remains solid for two years despite facing consecutive drought years. The net profit after tax for the half year was $48.7 million which showed 96 percent increase from the corresponding year. EBITDA for past six months was up 53 percent to $110.7 million. The bottom line had provision of $26.4 million as a probable liability that may arise due to litigation by Standard Chartered Bank to AWB (USA). Standard Chartered has a long due dispute with AWB (USA) over a commercial promissory note. AWB kept its interim dividend of four cents. At the end of the day trading, AWB shares closed today at one cent lower than yesterday at $3.39.

AWB Chairman Brendan Stewart quoted that rebuilding of the company was showcasing better results. Managing Director Gordon Davis said that all division had recorded profits including the financial division in spite of challenging marketing conditions and increased funding costs.

According to the analysts and market experts, recent rains have helped AWB to be post an interim profit of 88.5 percent. However, the seasonal conditions are still forecasted to be uncertain, thus this profit cannot be taken as a projection of annual performance. Mr Gordon also added that since the rainfall projections for the coming months remain uncertain, it would be difficult to project the results for the second half.

AWB would be working in a deregulated environment from July when the export marketing arrangements would be in place. The Federal Government would be dismantling the single desk wheat export arrangement which made AWB to hold monopoly over the market.

AWB shall also hold an unusual meeting of its share holders on August 21 to vote on abolishing grower control of the company. The company aims to place more hold on shareholders which would enable the company to gain more flexibility in the deregulated market. In order to get the proposal changed, at least 75% of the growers must vote in favour of the proposed change. It had already failed at its first attempt in February earlier this year.