| ||Market Update|| ||
At the announcement of the half year results in May 2006, AWB Limited announced that it expected to achieve a forecast underlying PBTA for the year ending 30 September 2006 similar to the previous year’s underlying PBTA of $184.5 million. This was, however, subject to normal seasonal and operational conditions.
Unfortunately, the current drought affecting farmers across Australia has resulted in lower than expected merchandise and fertiliser sales in the critical months of May, June and early July.
AWB’s performance has also been impacted by the continuation of difficult trading conditions and volatile world wheat markets which have squeezed commodity margins.
As a result, lower than expected outcomes are now forecast in Landmark, Grain Acquisition and Trading and Pool Management Services.
AWB is therefore reducing its forecast underlying PBTA for the year ending 30 September 2006 by 20-25 % from previous guidance.
Furthermore, due to the below average rainfall across Australia, the AWB forecast for domestic wheat production for the 2006/07 crop has now been reduced from 23-25 million tonnes to 18-20 million tonnes.
As mentioned at the half year results, management is committed to reducing costs and is initiating programmes to address business performance issues.
AWB remains committed to our long term strategy of growth through diversification in commodity management, rural services and financial services.
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