Australia's AWB doubles profit, cut wheat forecast

Australia's monopoly wheat exporter AWB Ltd said on Wednesday its 2003/04 annual net profit more than doubled, aided by recovery from drought, but downgraded its forecast for Australia's current wheat crop. AWB said it expected a 2004/05-wheat crop of 20-22 million tonnes, down about 7 percent from a previous forecast of 21-24 million tonnes, given recent hot, dry weather, particularly in New South Wales State.
It also forecast that its current year earnings would be "comparable" with the previous year's result. Shares in AWB added 0.8 percent to A$4.90 in trade, but remain off highs above A$5 in April.
AWB posted a net profit of A$96.86 million ($76.27 million) for the year to September 30, up 121 percent on A$43.89 million a year earlier. Net profit before goodwill and amortisation of A$134.7 million beat its own forecast of A$110-A$120 million.
"The profit (is) a strong result for shareholders and (was) supported by improved seasonal conditions in many parts of rural Australia last year and the inclusion of a full year of Landmark's earnings," managing director Andrew Lindbergh said.
AWB acquired the Landmark rural services group for A$825 million, including A$107 million in debt, in 2003.
AWB handled a significantly larger wheat volume from the 2003/04 record harvest of 25.2 million tonnes, up from a drought-affected 9.7 million tonnes the year before, Lindbergh said.
Significant sales had been made to China, Egypt, Indonesia, Iraq, Japan and South Korea.
Grain acquisition and trading, backed by a successful ship chartering business in a favourable freight market, contributed A$81 million to profit before tax, up A$56.4 million on the previous year.
Freight volumes jumped 83 percent to 8 million tonnes. Landmark contributed A$72.6 million to profits before tax, up 64 percent on the previous year. Finance and risk management products contributed A$30 million, down by A$6.1 million on the previous year.
Pool management services contributed A$27.5 million profit before tax, up by 46 percent.
Lindbergh said the drought was expected to continue to have some lagging impact on livestock and wool sales, but the markets for merchandise and fertiliser were promising and livestock prices looked set to remain strong.
AWB paid a steady final dividend of 11 cents a share, bringing the total for the year to 25 cents.