The Board of AWB Limited today announced a net profit after tax (NPAT) of $157.1 million for the full year ended 30 September 2005. The result represents solid progress from 2004 and delivers on expected earnings for this year. With strong contributions from finance and rural services, it has also further demonstrated the benefits of AWB’s diversification strategy.
Excluding signficant items (most noteably the sale of its stake in Futuris Corporation) AWB Limited delivered an NPAT of $115.3 million – up 19% from the previous year.
Reported earnings per share for 2005 was 45.7 cents, 59% higher than the previous year.
The Chairman, Mr Brendan Stewart said “The Board has declared a fully franked final dividend of 13 cents per share, up two cents from last year. This brings the total full year dividend to 29 cents per share, an increase of four cents (16%) from last year.”
AWB Limited Managing Director, Mr Andrew Lindberg, said the benefit of the company’s diversification strategy was a feature of its 2005 performance.
“Clearly, diversification is paying dividends for AWB and its shareholders,” Mr Lindberg said. “This year’s results include pleasing contributions from Landmark’s rural services business as well as from our financial services offering. This has allowed us to deliver a 19% increase in NPAT before significant items, despite having significantly lower wheat volumes from the 2004/05 harvest and late rains for the current cropping season. This is the first time AWB has been able to increase its year on year profit when it has received lower year on year wheat volumes,” Mr Lindberg said.
“With more diverse streams of income AWB is less reliant upon the size of the Australian wheat crop. Our strategy remains to strengthen our core business and pursue sustainable growth in areas of commodity management, financial services and rural services,” Mr Lindberg said.
Performance highlights for the 2005 financial year included Landmark, Finance and Risk Management, and Pool Management Services. Profitability from Trading and Commodities was reduced due to less favourable trading conditions in the ocean freight market and the domestic grain market.
Mr Lindberg said the outlook for AWB in 2006 remained positive.
“In the financial services area we anticipate further growth, and with new, more flexible funding arrangements AWB is well positioned to lead and capture that growth. With good seasonal conditions the outlook remains promising for rural services such as livestock, merchandise and fertiliser. Improved grain volumes anticipated in 2006 should increase profitability in our grain trading area and domestic supply chain investments, while favourable currency movements will have a positive impact across a number of our business streams,” Mr Lindberg said.
“With a more diversified business platform and improvements in key market drivers, AWB is expecting profits to be around 10% higher than this year’s profit before tax, sale of Futuris shares and amortisation of $184.5 million, subject to normal seasonal and operating conditions,” Mr Lindberg said.
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