E-Malt.com News article: 2721

Australia: Grain storage company AusBulk's managing director John Murray said on June 1 he had generally received positive feedback about a planned merger with ABB Grain Ltd, according to Asia Pulse. Mr Murray's comments came after AusBulk posted a A $31.8 million (US$22.71 million) net profit for the six months to March 31 this year, up 63 % from the previous first half.

The result was boosted by the 2003/04 harvest, the third largest on record in South Australia, bringing in revenue of A$366 million (US$261.42 million) for AusBulk. The company was also boosted by a A$6.8 million (US$4.86 million) one-off tax benefit.

AusBulk announced a few weeks ago that it would be part of an A$850 million (US$607.11 million) merger - along with its 53.5 per cent shareholder United Grower Holdings (UGH) - with ABB Grain. The new company would go under the ABB Grain name and would come under ABB Grain's current Australian Stock Exchange (ASX) listing. The merger announcement followed several years of on-again, off-again discussions with ABB Grain. AusBulk is not listed on the ASX, but has a shareholder base among grain growers.

Mr Murray said on June 1 he had received some feedback from the growers. "Obviously there's quite a long process ahead, with ACCC approval required, tax rulings required, we have got to go through a court approved scheme of arrangement," he said. "In general the majority of growers believe that the benefits of the merger are such that it's positive for the company." Mr Murray said he expected an ACCC decision on the merger some time in August, and extraordinary general meetings for the three companies - ABB Grain, AusBulk and UGH - are scheduled for September 23.

AusBulk runs a network of 113 country silos and seven export terminals in South Australia and Victoria, as well as a malt business. ABB Grain holds the barley export licence for South Australia. Mr Murray also said good harvests in South Australia were likely to continue. "I think there's a growing, improving trend in South Australia," Mr Murray said.

"Cropping practices are improving, yields are gradually improving. We will still get ups and downs, but I think harvests will be increasing over the next five to 10 years." However, both the grain handling division and malting divisions suffered some lag effects from the poor harvest in the previous financial year.

Chairman Max Venning said AusBulk's full-year performance would largely be underpinned by the half-year profit. Due to the nature of AusBulk's core storage and handling business, the majority of profit is usually generated in the first half of the year.


01 June, 2004