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TAS Country : November 18th 2010
Friday, November 19, 2010 Tasmanian Country 13 News BRAVE FACE: AWB's managing director Gordon Davis. $54m loss caps off bad year for AWB AWB Limited has reported its second big loss in a row in possibly its last report to the Australian share mar- ket. In unaudited results, the company reported a net loss after tax of $54.9 mil- lion for the year ended September 30. It followed a $250.8 mil- lion after-tax loss last year after a disastrous foray into Brazil left the company haemorrhaging badly. Residual losses from the discontinued Brazilian business, its Hi-Fert invest- ment, the sale and restructuring of Landmark Financial Services and settlement of the Watson shareholder class action had sent AWB into the red in 2009-10. The company also paid out $8.6 million to Grain- Corp as the ''break fee'' after it broke off the merger proposal between the two agribusinesses in August when Canadian fertiliser giant Agrium Inc made a better offer. AWB announced that no dividend would be paid to shareholders for the second year in a row. Managing director Gordon Davis put a posi- tive spin on the result, saying the overall perform- ance of continuing busin- esses was ''solid'', with the exception being the Aust- ralian commodity manage- ment division, which suf- fered from reduced margins in grain sales. AWB chief financial offi- cer Phillip Gentry said earnings before interest and tax for the rural ser- vices division had risen by 31 per cent to $61 million. Mr Gentry said the wool and insurance businesses performed strongly and there were increased crop chemical and fertiliser sales due to better weather. He said there was a ''solid performance'' in the international commodity division, though earnings before interest, tax, amort- isation and depreciation were 36.4 per cent lower than last financial year. Mr Gentry said there was more European wheat supplied to Middle Eastern millers and sourcing of grain out of the Black Sea region had increased to 700,000 tonnes in 2009-10 from 400,000 tonnes the previous year. AWB said there was strong pool management in the Australian commodity management division and the GrainFlow and train businesses but grain mar- keting earnings were ''sub- stantially down''. Mr Davis said Aust- ralian grain was ''uncom- petitive'' for most of the year in the global market. He said AWB accumu- lated a lot of wheat at harvest then enacted its normal hedging program to reduce its risk. But the wheat remained uncompetitive until the middle of this year, with margins depressed. ''We have since seen more volumes moved, par- ticularly since the Russian shortages,'' he said. The Weekly Times Shareholders vote to sell Aussie icon' AWB Limited shareholders have overwhelmingly voted in favour of selling their company to Canadian fertiliser giant Agrium Inc. A ballot on the scheme of arrangement for Agrium to buy all of AWB's capital at $1.50 a share was conducted in Melbourne on Tuesday. More than 97.8 per cent of the votes cast were in favour of the move, with 80 per cent of share- holders supporting the deal. Agrium needed 75 per cent of the ballot, plus more than half the shareholders to agree to the pro- posal. An extraordinary general meet- ing of AWB was held on Tuesday to formally remove the 10 per cent shareholding limit from AWB's constitution to allow Agrium to buy it outright. Of the votes cast, 97.7 per cent were in favour of removing the cap. South Australian farmer and former board member Brendan Fitzgerald questioned the indepen- dent expert valuation of the com- pany. Mr Fitzgerald said he was sur- prised at how low the valuation was. The takeover of AWB will not take effect until December 3. The ballot means AWB will fall into foreign hands after 60 years as a statutory authority and 11 years as an Australian-owned public company. It is the second big Australian grain company to be taken over by foreign interests. Leading grain company ABB Grain Limited went offshore last year when it was sold to Canadian firm Viterra. The difference between the two takeovers is that ABB Grain share- holders were allocated cash and shares on acceptance of the buyout, but Agrium will take all AWB's scrip. Agrium will buy AWB for $1.2 billion, about 40 per cent more than a bid by GrainCorp pitched as a merger deal to AWB share- holders in late July. GrainCorp picked up $8.6 mil- lion as a ''break fee'' when the AWB board broke off its support for the July deal in favour of the superior Agrium bid. Kerang grain grower Geoff Kendell said it was a sad day when an iconic Australian business was lost to foreign interests. ''Time will tell whether it will be a good thing for farmers,'' Mr Kendell said. The Weekly Times ANZ Australia s best value agribusiness bank. As awarded by CANSTAR CANNEX 2009 and 2010. Financial Services Research Group CANSTAR CANNEX compared 15 major agribusiness banks, credit unions and building societies to determine the bank that o ered the best value to agribusiness. Australia and New Zealand Banking Group Limited (ANZ) ABN 11 005 357 522. ANZ s colour blue is a trade mark o ANZ. Commitment is vital in a successful relationship. In business, it s more important than ever. That s why we ve just put on over 100 more ANZ Agribusiness Managers and Assistant Managers throughout the whole country. It s their job to work alongside you, ensuring your business not only runs smoothly, but grows over the long term. So whether it s at your o ce, your property or over the phone, make an appointment with an ANZ Agribusiness Manager today. Visit anz.com/agri or call 1800 462 474 today. e ve put on over 100 more ANZ Agribusiness bankers because we re committed to your business.
November 11th 2010
November 25th 2010