Australia: Grain company ABB Grain Ltd announced on February 25 it expected a net profit before goodwill amortisation of A$35-$37 million (US$27.4- $29 million) for this financial year. Speaking at the company's annual general meeting in Adelaide, ABB managing director Michael Iwaniw said the profit forecast was based on the group's current business outlook, which included assumptions about grain outturn and shipping patterns. He said hot weather in October and later unseasonal, heavy rain in December had significantly affected crop yields.
Mr Iwaniw said the wide extent of crop damage across South Australia and Victoria meant that company profit would be affected by the lower than anticipated volumes in the 2004/05 harvest, particularly the storage and handling division which had received 4.2 million tonnes of grain for the season. "It's not as low as the drought season receival of 2002/03 but it is well below what was being anticipated as the season progressed," he said.
He said while some sections of the company were not affected by the poor harvest, others were and this would hold profit performance below long-term potential. "Based on our current business outlook, which incorporates assumptions about grain outturn and shipping patterns, for the year ending on the 30th of September we are forecasting net profit after tax and before goodwill amortisation in the range of $35-37 million," he said.
ABB merged with South Australian grain handler AusBulk and its holding company United Grower Holdings in September last year. Mr Iwaniw told shareholders merger integration was proceeding according to plan in terms of cost synergies and would achieve its objectives. He said some of the benefits of bringing together the companies were already being achieved and others would come as integration proceeded, Asia Pulse commented.
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