The Chairman of AWB Limited, Brendan Stewart today announced an after-tax profit of $29.9 million for the half-year ended 31 March 2003.
In recognition of the company’s capital position, retained earnings, available franking credits and the Board’s desire to maintain a stable dividend policy the Board has declared a fully franked interim dividend of 14 cents per share, to be distributed to shareholders on 4 July 2003 for shareholders registered as at 23 June 2003.
AWB Limited’s Managing Director, Mr Andrew Lindberg, said this interim profit result was a solid result given the severity of the drought that Australia has experienced.
"The drought conditions resulted in significantly lower grain production from the 2002/03 harvest, with wheat production estimated at 9.7 million tonnes, a reduction of 60% from the 2001/02 harvest of 24.5 million tonnes," said Mr Lindberg.
"The result represents a 61% decrease in profit in comparison to the prior corresponding half-year and this is principally attributable to the drought currently affecting all parts of Australia," said Mr Lindberg.
AWB’s earnings per share of 10.9 cents are 64% lower than the prior corresponding half-year.
The major profit contributions for the 2003 half-year result were from Finance and Risk Management, Grain Acquisition and Trading business areas and Pool Management Services.
"AWB launched a new range of Finance and Risk Management products for the 2002/03 season and these were well supported by Australian wheat growers," said Mr Lindberg.
"These new products helped AWB maintain its market share in the face of increased competition," said Mr Lindberg.
The Board is forecasting a full-year profit after tax result of between $40 million and $45 million for the year ending 30 September 2003. This forecast includes approximately $3.5 million profit on the sale of AWB’s Head Office, Ceres House.
"We are on track to reach that forecast range and the Board is confident that the ongoing focus on maximising AWB National Pool returns and the financial performance of the company will continue to deliver strong returns to AWB’s shareholders, the vast majority of whom are Australian wheat growers," said Mr Lindberg.
Earlier this month the Bureau of Meteorology officially declared the El Niño weather phenomenon, believed to have underscored one of the worst droughts in Australian history this season, over.
"AWB is optimistic that the breaking of El Nino and some good rains in the wheatbelt of Australia will result in an above average wheat winter crop this season," said Mr Lindberg.
"We are currently forecasting domestic wheat production in the range of 22-24 million tonnes which is based on normal climatic conditions for the season ahead.
"In line with our strategy of a strong grains business, AWB is continuing to hold discussions with a number of companies in the grains industry to secure consolidation benefits," said Mr Lindberg.
AWB’s strategic investment in Futuris is a part of AWB’s related strategy to rationally diversify earnings in the areas of rural and financial services.
"The primary objective of this investment is to pursue opportunities for co-operation with Elders," said Mr Lindberg.