E-Malt.com News article: 3742

Australia: Listed agricultural company, ABB Grain Ltd, announced on November 30, 2004 it has produced a net profit of $17.1 million, after tax, for the full year ended on 30 September 2004. The company has registered a strong revenue of A$796. Managing Director, Michael Iwaniw, said the result reflected the geographic growth in the company’s grain accumulation business and the popularity of its grain-related financial products during the 2003/04 season. “The 2003/04 financial year was one of significant growth for ABB with stock traded exceeding 6 million tonnes for the first time, including pool barley.”

Mr Iwaniw said the profit figure, adjusted for merger costs, was slightly higher than had been forecast in the company’s explanatory statement released prior to the merger with AusBulk Ltd and United Grower Holdings Ltd, which occurred on September 27. “We came out ahead because our trading division performed better in the closing months of the year than we had expected and customer shipping schedules were brought forward increasing our export tonnage and related pool management fees.”

Mr Iwaniw said the company had already paid a fully-franked final dividend of 13 cents per share and a fully-franked special dividend per share of 15 cents per share for the financial year on 24 September, to ensure that the distribution was directed to pre-merger B-Class shareholders. The final dividend would normally have been paid around the time of the annual meeting in February. The special and final dividends, together with the fully franked interim dividend, brought the full year’s dividend to 40 cents per share.

As the merger of ABB, AusBulk and UGH was effective on 27 September, 2004, the results included four days of trading for the merged entity, however Mr Iwaniw said the financial impact on profit for this period was negligible. The merger’s impact on the balance sheet however was substantial with the net assets of the three companies now combined. Mr Iwaniw, said the merger was proceeding in line with plans.

“We have achieved significant change already, with the marketing teams working as a combined unit this harvest, offering a combined suite of products across the commodity range,” he said.

The company’s storage and handling division, acquired through the merger with AusBulk, was well into the 2004/05 harvest. It was apparent that the dry October was having a significant impact on grain yields, and as a consequence the receival estimate was now 5 million tonnes rather than the estimate of 5.5 million tonnes released soon after deliveries began.

Mr Iwaniw said in line with its usual practice ABB would release its profit forecast at the company’s annual general meeting in February. Obviously the seasonal impact on storage and handling receivals would flow through to those forecasts.

“The deterioration in the 2004/05 harvest is not isolated to South Australia, it is being experienced across the country.”

Mr Iwaniw said the malting business, spearheaded by the Joe White Maltings brand, was continuing to perform well with production at capacity. The company had plans in hand to expand production to allow for business growth.

Mr Iwaniw said AusBulk’s net profit results for the year to 30 September, 2004, of $32.4 million after tax, including amortisation but excluding merger costs, had been in line with the forecasts in the explanatory statement.

Mr Iwaniw said ABB Grain had set the final merger share price at $7.39, which reflected a weighted average of 10 days trading before and 10 days trading after the merger’s effective date of 27 September 2004.

“This puts merger goodwill at about $271 million, which is deemed to be recoverable under current accounting standards,” he said.

The company planned to review this position in light of new international standards prior to their introduction at the year ending on 30 September 2006.



01 December, 2004