E-Malt.com News article: 1130

Leading Australian agribusiness AusBulk today announced a solid after-tax profit of $19.5 million for the half year to March 31, 2003, despite the impact of the most serious drought in two decades.

AusBulk chairman Kevin O’Driscoll said the result, which was based on revenue of $316 million, reflected the rigorous cost controls implemented by the company in the past six months. Mr O'Driscoll said the company's profit result was an outstanding achievement given that deliveries to the company's grain handling division had fallen from 8.6 million tonnes during the 2001/2002 harvest to just over 3 million tonnes in 2002/2003.

AusBulk managing director Mr John Murray said relative to the results already released by a number of other grain industry companies, AusBulk had been able to perform well in what had been an extremely testing harvest. “It is significant that one third of the profit result was generated from the company’s malting and grain marketing divisions. This is a testament to our business strategy of diversifying the business base, which reduces the core storage and handling business’ exposure to seasonal factors,” Mr Murray said.

This is a testament to our business strategy of diversifying the business base, which reduces the core storage and handling business' exposure to seasonal factors," Mr Murray said.

He said that as the Joe White Maltings acquisition had only been completed in January 2003 the full financial impact of this business on overall profit levels would not be seen until the next financial year.

"AusBulk's two malting businesses (Joe White Maltings and the Adelaide Malting Company) are being merged into one entity and will form part of AusBulk's new malting division -- AusMalt," Mr Murray said.

“Both the merger of the two companies and the integration of the malting business with AusBulk’s other business divisions are proceeding well and we are on target to achieve the significant synergies which flow from a vertically integrated business.”

Mr Murray said the malting plants around the country were working at capacity and the company was considering future investment plans simply to take account of the organic growth in export markets, which was expected to continue.

He said however that the devastating drought of last season had had some impact on the malting business with the surge in domestic barley prices, which couldn’t be fully extracted from malt pricing. The grain marketing business, although affected by the reduced volume of grain available, had been able to capitalise on expanded domestic marketing opportunities opened up in the eastern states.

“We are optimistic about retaining many of the new clients that were gained as a consequence. In addition our grain marketing business in WA continues to grow and further expansion next year is predicted as a result of the consumptive needs of the malting business in that State.”

Mr Murray said that while the storage and handling division results had been adversely affected by the severe drought AusBulk was confident that long-term growth trends for the South Australian grain crop would continue.


27 May, 2003