Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Ballance Profit Tops $49 Million


July 28, 2004

Ballance Profit Tops $49 Million

Puts $18.4 million cash in hands of farmers

Statement made by David Graham, Chairman, Ballance Agri-Nutrients Limited

Productivity and efficiency gains assisted fertiliser cooperative Ballance Agri-Nutrients to post a Group operating surplus of $49.1 million on revenue of $416.6 million for the financial year ending May 31, 2004.

On the strength of this strong result Ballance has announced a combined end of year cash payout to its 17,800 farmer shareholders will be $18.4 million during a year in which it lowered fertiliser prices to five year lows.

By maintaining our payout at a level similar to last year’s high return, and combining it with price reductions that saved farmers well over $10 million on their fertiliser purchases, we have given farmer shareholders a double bonus during a year when there were concerns about future farm profitability and its affect on farm cashflow.

Sales volume at 1.4 million tonnes was similar to last year’s volumes.

Our total payout to shareholders for the 2003-04 season will be the equivalent of $18.58 a tonne. This payout will be made up of an average cash rebate of $15 a tonne, and an imputed divided of 8 cents per share (equivalent to a further $2.40 cash a tonne and $1.18 in tax credits a tonne for fully paid up shareholders).

During the year we deliberately balanced our twin objectives, that of making quality fertilisers available to members at the lowest possible economic cost, while securing our future success by reinvesting heavily in the business.

We invested $21 million in capital works that saw major improvements in our manufacturing, distribution and IT capabilities. A further $2.5 million was invested in our own research and development activities in addition to funding initiatives undertaken by Fert Research, the industry’s fully funded research association.

This investment was in the main funded from a strong $58.3 million operating cash flow, and at year end the company is in a positive funds position with short term deposits more than offsetting bank debt.

Our balance sheet is in a very healthy position, with the Group’s equity ratio including minority interests being 69.5% and total assets at year end $326 million.
Our strong financial performance came from our ability to continue to build on the gains and benefits achieved by maintaining our focus on delivering high quality plant nutrients and expertise to our farmer customers.

We also maintained a tight control on costs, with operational expenses representing only 17% of our total revenue.

While we benefited from a strong NZ exchange rate to the US dollar, which reduced raw material costs, this was more than offset by international freight costs and fuel prices spiking to unprecedented levels.

During the year Ballance introduced two new innovative products to the market – Bioshield grassgrub, a biological control agent, and n-care, a world first granular nitrification inhibitor that can be blended with nitrogen fertiliser.

As well as having major commercial potential and offering environmental benefits in New Zealand, the potential exists for the intellectual property associated with both to be marketed overseas.

The value of the Group’s 100% owned Kapuni urea plant was written down by a further $20 million (it was also written down by $20 million last year), reflecting the ongoing uncertainty about the ability of the operation to gain long term gas supplies at prices that will allow us to manufacture urea at commercially acceptable prices.

We already import significant supplies of nitrogen fertiliser as demand is higher than can be manufactured at Kapuni.

The write downs of the past two years reflect a prudent approach to Kapuni’s future, and if long-term supply contracts at realistic prices cannot be achieved the plant will be closed.

Our 100% owned aerial top dressing operation, Super Air, consolidated its position as a strong central and north North Island operation. Super Air’s fleet consists of 17 aircraft.

The board has every reason to believe that the 2004-05 financial year will represent another good year for Ballance in terms of volume sales and financial performance.

We have completed many of the major capital expenditure projects necessary to make our operations efficient and competitive, and we have low levels of debt.

In the current year our total planned capital expenditure is a manageable $24 million, and this will be funded from cash flow.

Ballance is committed to remaining a specialist nutrient management cooperative, and will maintain its emphasis on delivering quality products, expert advice, convenient distribution, and assisting farmers increase their farm output while operating in an environmentally sustainable way.

ENDS

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

I Sing The Highway Electric: Charge Net NZ To Connect New Zealand

BMW is turning Middle Earth electric after today announcing a substantial contribution to the charging network Charge Net NZ. This landmark partnership will enable Kiwis to drive their electric vehicles (EVs) right across New Zealand through the installation of a fast charging highway stretching from Kaitaia to Invercargill. More>>

ALSO:

Watch This Space: Mahia Rocket Lab Launch Site Officially Opened

Economic Development Minster Steven Joyce today opened New Zealand’s first orbital launch site, Rocket Lab Launch Complex 1, on the Mahia Peninsula on the North Island’s east coast. More>>

Earlier:

Marketing Rocks!
Ig Nobel Award Winners Assess The Personality Of Rocks

A Massey University marketing lecturer has received the 2016 Ig Nobel Prize for economics for a research project that asked university students to describe the “brand personalities” of three rocks. More>>

ALSO:

Nurofen Promotion: Reckitt Benckiser To Plead Guilty To Misleading Ads

Reckitt Benckiser (New Zealand) intends to plead guilty to charges of misleading consumers over the way it promoted a range of Nurofen products, the Commerce Commission says. More>>

ALSO:

Half A Billion Accounts, Including Xtra: Yahoo Confirms Huge Data Breach

The account information may have included names, email addresses, telephone numbers, dates of birth, hashed passwords (the vast majority with bcrypt) and, in some cases, encrypted or unencrypted security questions and answers. More>>

ALSO:

Rural Branches: Westpac To Close 19 Branches, ANZ Looks At 7

Westpac confirms it will close nineteen branches across the country; ANZ closes its Ngaruawahia branch and is consulting on plans to close six more branches; The bank workers union says many of its members are nervous about their futures and asking ... More>>

Interest Rates: RBNZ's Wheeler Keeps OCR At 2%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2 percent and said more easing will be needed to get inflation back within the target band. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news