E-Malt.com News article: 2690

Australia: ABB Grain Ltd increased net profit 37.5 % to $12.44 million in the six months to March 31 from $9.05 million for the first half of last year. Revenue rose 6.7% to $433.41 million from $406.27 million. Earnings per share were 25.8c, up from 19.7c. Interim dividend has been increased from 7c to 12c, fully franked, payable on July 5 to shareholders registered June 18. ABB has suspended its dividend reinvestment plan for the July dividend, as part of the process towards the merger of ABB with AusBulk and United Grower Holdings, RWE Australian Business News said in a statement.

Directors said the main reasons for the profit increase were increased volume of grain received due to a much better season, and inclusion of trading from the Jossco group, acquired in July 2003. They noted the 27.5 % rise in operating profit to $16.67 million from $13.07 million was partly due to the impact of tax consolidation. When last year's revenue is adjusted for the change in accounting for pooling activities (which saw pooling revenue excluded from this year's figure), revenue was up 134 per cent.

Chairman Mr Trevor Day said the half-year results were "very pleasing" with a positive outlook for the full year. "We are confident that we will reach our net profit after tax forecast of $18 to $19 million for the full 2004 financial year." He said, "Large harvest production from the 2003/04 season, combined with ABB's expansion into the eastern states, meant we were able to accumulate more grain from a wider area. "ABB's increased marketing activities from a broader grain product base also contributed significantly to the company's results, as did growth in the container trading of grain."

Mr Day said another factor that influenced the results was the profit derived from the financial services business of ABB, with the use of ABB's financial products for 2003/04 reflecting a return to more normal levels after the 2002/03 season drought. ABB said operating results for the second half would be dependent upon sales volumes and margins. "We expect that the second half will be slightly lower due to the expectation of lower second-half sales volumes and margins," the directors said.


26 May, 2004