AWB Limited today announced that underlying net profit after tax (NPAT) for the half year ended 31st March 2008 is expected to be in the range of $45 – $52 million.
AWB Managing Director, Mr Gordon Davis said the better than expected result is largely attributable to a strong performance by the Landmark business, in part due to increased agricultural activity following recent rains.
“In addition, Financial Services and Australian Commodities divisions have been performing solidly,” Mr Davis said.
“However, AWB expects International Commodities division’s earnings to be significantly reduced compared with the prior corresponding period.”
AWB also announced that it will continue to keep under active review the taking of a potential provision of A$26.1 million in respect of the half year accounts ended 31st March 2008 for a possible liability arising from litigation brought by the Standard Chartered Bank (SCB) against AWB Limited’s wholly-owned subsidiary AWB (USA) Limited. Mr Davis said “the Company continues to be of the view that AWB (USA) has a strong position and will vigorously pursue all of its appeal avenues.”
AWB’s half year results are still being finalised and they will be announced on Wednesday 21st May 2008.
Background to Standard Chartered Bank (SCB) litigation
In February 2005, SCB brought an action against AWB (USA) Ltd in the US District Court for the Southern District of New York in relation to a long-standing commercial promissory note dispute. The dispute arose as a result of default by Indonesian counterparties concerning several sales of US soybeans to Indonesia in 2003 and 2004. Promissory notes from the purchasers, and a guarantee from the Commodity Credit Corporation of the USA, were assigned by AWB (USA) to the SCB. The Indonesian purchasers defaulted. SCB then claimed that as a result it was left with a financial shortfall and claimed damages from AWB (USA) Limited.
AWB previously announced that the Court had handed down a decision dated 14th January 2008, directing the entry of judgment against AWB (USA) Ltd in the sum of approximately US$22.7m plus interest of approximately US$1.5m. AWB (USA) filed an appeal against this judgment on 23rd January 2008.
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