PROMINENT grain company ABB Grain Ltd has notched up a strong after-tax net profit of almost $49 million for the year to end-September.
Managing director Michael Iwaniw said the result, which was more than six times greater than the previous year, was built on strong contributions from all the company's business sectors.
“The full-year profit is a pleasing result, delivered despite a below average harvest in 2007,'' managing director Michael Iwaniw said.
“(It) further supports the ABB strategy of diversification, growth and development of an integrated business model.''
The stand-out performance was from the company's grain marketing division, which turned a pre-tax loss of $10.4 million the previous year into a $35.1 million profit in 2007-08 on the basis of grain sales of 4.4 million tonnes.
Mr Iwaniw said this outcome reflected the company's strong customer relationships, which would serve it well as it moved into the deregulated wheat export market. The company’s grain operations in NZ recorded record outcomes, while a new joint venture in the Ukraine had sold 400,000 tonnes, he said
The company's supply chain activities generated pre-tax profits of $16.4 million - more than double the previous year - reflecting a 23 per cent increase in storage and handling charges and receivals of 3.5 million tones of grain.
The barley malting division, Joe White Maltings, recorded a 21 per cent lift in earnings before interest and tax and contributed $34.3 million to pre-tax profits, up more than 11 per cent on the previous year. This reflected a strategy of keeping the company's eight malt houses working at full capacity with good logistical support, Mr Iwaniw said.
The company’s new rural services division contributed $3.9 million in pre-tax profits in its first full year of operation
Mr Iwaniw said the company had also restructured its balance sheet, with big reductions in debt and working capital during the second half of the year, and a new equity raising of $187 million.
