GRAIN co-op CBH expects more than a $100 million profit turnaround this financial year as it rides the success of WA's record crop.
Speaking at yesterday's annual general meeting, CBH chief executive Andy Crane said he would be pleased to give growers better news next year after a disappointing 2011 financial year, Perth Now reports.
“While it’s too early in the financial year to make a firm forecast, we estimate profit to be close to $100 million,” he said.
“This will be a big profit… (and) any surplus we make is returned one way or another to our growers.”
The co-operative’s “big” profit is riding on the back of Western Australia's biggest harvest, which at 15 million tonnes, more than doubled the grain received in the 2011 financial year.
As growers delivered just 6.5 million tonnes in the 2010/11 harvest, CBH reported a $21.4 million loss in the 12 months to September last year.
Dr Crane said he thought the company “rose to the challenge” well as it tried to reduce costs and overheads.
Despite a good season for the company’s eastern states farmers, Dr Crane said it had been “challenging conditions” for marketing the crop as the market become more competitive than ever.
The company was hampered by a $23 million loss in marketing, accumulation and trading.
“While the loss in marketing business was disappointing, it should not overshadow the work CBH has done to improve the structure and efficiency in the business, nor the changes we’ve made to put the centre of everything we do,” he said.
At yesterday’s meeting, chairman Neil Wandel said it was important people recognised that the company’s diversification was critical to helping it through drought years.
He pointed to the company’s investment in the Interflour Group’s flour mills, which contributed a profit of $14.7 million to CBH’s bottom line.
Also at the meeting, members changed their mind and voted in favour of increasing the director’s fee cap despite refusing in the previous year.
Mr Wandel pleaded with voters that it was essential to attracting and retaining talented people to the roles as the current fee was not compared to that being paid by companies of similar sizes.
He said it was important growers were offered assistance for replacing their own labour on the farm as well as being away from their family.
The director’s fee cap will increase by $226,000 to $1.126 million, as recommended by Gerard Daniels.
Read more at Perth Now