| ||Market update on AWB earnings outlook|| ||
AWB earnings in 2006/2007 will be adversely affected by the prolonged drought resulting in the under-performance of some businesses, and changes in wheat marketing arrangements.
The Managing Director of AWB Limited, Mr Gordon Davis, said internal forecasts for underlying profit before tax are currently at the bottom end of the range of analyst expectations between $67 million and $116 million.
Mr Davis said earnings this financial year will be adversely affected by:
- the impact of the continuing drought on the Australian commodity management activities, especially chartering and Grainflow;
- the impact of the continuing drought on Landmark rural services business and insurance sales and loan book growth in Landmark Financial Services;
- under-performance of the meat and livestock custom feeding business which is being restructured; and
- changes in wheat marketing arrangements.
Mr Davis said that after one-off costs, particularly redundancy and restructuring expenses, AWB expects net profit after tax for the current year to be approximately 30-40 per cent below the reported net profit after tax result for last financial year of $58.1 million.
“Our earnings forecasts are highly conditional on the length of the drought and any changes to wheat export marketing arrangements,” Mr Davis said.
“We are closely monitoring performance and are continuing to implement remedial measures to minimise the impact of the drought on earnings. We will update shareholders on progress at our half year results in May.”
Media contact: Peter McBride on 03 9209 2174 or 0417 662 451