The Chairman of AWB Limited, Mr Brendan Stewart, today announced an after-tax profit of $54.1 million for the half-year ended 31 March 2004.
“In line with the Board’s policy to maintain a stable dividend, we have declared a fully franked interim dividend of 14 cents per share to be distributed to eligible shareholders on 2 July 2004, for shareholders registered as at 18 June 2004 ” said Mr Stewart.
The Board intends to maintain a stable dividend subject to future financial performance and capital requirements.
AWB Limited Managing Director, Mr Andrew Lindberg, said the interim profit was a good result for shareholders, and had been supported by improved seasonal conditions in many parts of rural Australia.
AWB’s earnings per share of 16.3 cents is 50% higher than the prior corresponding half-year.
“A major driver for the improved result across many business streams has been significantly larger wheat volumes,” said Mr Lindberg.
“Wheat production from the 2003/04 harvest was a record 25.2 million tonnes, an increase of 160 per cent from the drought affected 2002/03 harvest of 9.7 million tonnes.
“Following the record crop, AWB National Pool has made excellent progress in its sales and marketing campaign with significant sales to Egypt, Indonesia, and China, supported by good currency and commodity risk management,” said Mr Lindberg.
Mr Lindberg said that Finance and Risk Management, Chartering and Grain Acquisition and Trading had made good contributions to the profit results for the first half. Landmark has also made a solid contribution to the result, with merchandise, fertiliser, livestock, real estate, finance, and insurance performing well. However, revenue from wool operations was down due to lower numbers of bales available for sale and low wool prices.
AWB has continued to develop its finance and risk management offering. Earlier this month, AWB launched a new finance loan product, Fastrak Finance, allowing farmers to leverage off their expected wheat harvest to fund their crop inputs.
“Following the integration of Landmark, AWB remains focused on continually improving and broadening its finance product range to farmers, and maintaining its market share in what is a very competitive environment,” said Mr Lindberg.
Mr Lindberg said the integration of Landmark was progressing well, and that the company was firmly on track to meet the first year synergy targets it set when it acquired the business last year.
“The consolidation of all corporate functions has been completed and the network consolidation, including the branding of all outlets is on track for completion by year end,” said Mr Lindberg.
“Procurement cost savings are already being achieved through renegotiation of contract terms and conditions with various suppliers, including telecommunications, animal health, travel, fleet and general merchandise.
“The Interest Bearing Deposit arrangements have now been transferred from Wesfarmers to AWB, after the successful application for an Australian Financial Services Licence,” said Mr Lindberg.
AWB reaffirmed its net profit after tax forecast of $110 million - $120 million, pre-goodwill amortisation and post one off costs, for the full year ending September 2004.
“We are well positioned to achieve our profit forecast,” said Mr Lindberg.
We are currently forecasting domestic wheat production in the range of 21–24 million tonnes which is based on normal climatic conditions for the season ahead.
“Going forward, management and the Board remain confident that the ongoing focus on our core wheat business while integrating and expanding our Landmark businesses will continue to deliver good returns to AWB’s shareholders, the majority of whom are Australian wheat growers,” said Mr Lindberg.
Eligible shareholders will be able to participate in the Dividend Reinvestment Plan. Due to high take up of the DRP by shareholders and the adequate levels of capital held by the Company, the 2004 interim dividend will not be underwritten by Macquarie Equity Capital Markets Limited.
For further detail on AWB Limited’s profit results visit the Investor Relations section and look under financial results.