Australia: ABB Grain Ltd announces half-year after tax profit of A$21.3 million

Listed agricultural company ABB Grain Ltd announced on 30 May 2005 a net profit after tax (NPAT) of A$21.3 million for the six months ending 31 March 2005 (A$30.8 million NPAT before goodwill amortization [NPATA]).

In making the results announcement, ABB managing director Michael Iwaniw said the company would pay a fully franked interim dividend of 8 cents per ABB B-Class share on 5 July, with a record date of 17 June.

The half-year results are inclusive of a full six months of operations for the businesses acquired through the company’s merger with AusBulk Ltd on 27 September 2004, Mr Iwaniw said. “The A$21.3 million interim NPAT reflects an increase from ABB’s previous year’s interim results primarily due to the newly acquired AusBulk businesses, in particular grain handling and malt manufacturing.

“Integration of the companies post-merger is moving along steadily with merger cost synergies on target. This is evident in the firm results we have achieved, especially when taking into account the very difficult harvest period.

“Grain production in the 2004/05 season was well below average in South Australia and Victoria, with grain receivals into our storage and handling network of just 4.2 million tonnes, compared to the five year average of around 6.0 million tonnes.”

Mr Iwaniw said the company’s forecast for the full 2005 financial year remained unchanged at NPAT before goodwill amortisation of A$35-A$37 million.

“Our grain handling profits normally accrue in the first half of the financial year, so achieving our forecast now is primarily dependent upon the timing and actual volumes of grain shipped over the remaining four months of the company's financial year.

“The 2005 financial year takes into account the 2004/05 harvest season just gone, and so is not affected by the current cropping conditions or what might happen in the near future weather-wise", Mr Iwaniw said.

“Looking ahead to the 2005/06 season, while the dry start to this year is not ideal there is still time for the new season (part of the 2006 financial year) to turn around.

"It’s much too early for comments on what this season will mean for our next financial year, because the crop is not yet in the ground and the season has many months right through winter and spring to go.”

Mr Iwaniw said the company’s dividend reinvestment plan (DRP) would operate for the July dividend at a 2.5% discount to the weighted average price of ABB shares sold on the ASX on the five business days immediately before and including the record date.

All shareholders have been sent details of the DRP and those who wish to change their participation status should advise Computershare Investor Services using the form provided by 16 June.

ABB’s financial year ends on 30 September 2005. For a summary of results see overleaf.

One of Australia’s longest established grain marketers, ABB originated in 1939 as the Australian Barley Board. In 1999 the Board was transformed into ABB Grain Ltd when shares were issued to grain growers giving them majority control and ownership in the company.

In July 2002, ABB listed on the Australian Stock Exchange (ASX) and in September 2004 merged with AusBulk Ltd and United Grower Holdings Ltd.

ABB’s core business is the provision of storage, processing, logistics, marketing and trading services in agricultural commodities along an integrated supply chain.

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