West Perth-based grain storage and marketer Co-operative Bulk Handling Group has warned that its strong $87.3 million net profit, a rise of a more than 40 per cent, won't be repeated this year due to the drought last season.
West Perth-based grain storage and marketer Co-operative Bulk Handling Group has warned that its strong $87.3 million net profit, a rise of a more than 40 per cent, won't be repeated this year due to the drought last season.
The cooperative said a surplus of $4 million was expected for the year ending October 31, after forecasting a $17 million loss for the group's storage and handling business. Last season Western Australia recorded a 6.4 million tonne harvest, about half that of the previous year.
CBH Group chief executive Imre Mencshelyi delivered the news to grower shareholders and industry stakeholders at the group's annual general meeting yesterday.
Its $100 million Asian flour mills investments, namely a 50 per cent stake in Vietnam-based Interflour Flour Mills Eastern Pearl Flour Mill in Indonesia, has also begun to reap financial benefits for the group, realizing a $11.7 million profit before tax, up from $4.8 million the last reporting period.
The results were on the back of a strong 12.5 million tonne harvest for the 2005-06 season.
Below is the full announcement:
The CBH Group held its 74th Annual Ordinary General Meeting yesterday, attended by grower shareholders and invited grain industry stakeholders.
CBH Group Chief Executive Officer, Imre Mencshelyi commented on the CBH Group's financial performance for the 2005-06 reporting period, which saw the Group achieve a considerable profit.
"Following a strong harvest of 12.5 million tonnes, the CBH Group recorded a corresponding after-tax surplus of $87.3 million for the 2005-06 financial year; an increase on last year's after-tax surplus of $61.1 million," Mr Mencshelyi said.
"Coupled with this performance is the growth in value of the CBH Group's total assets, now worth approximately $1.2 billion.
"In addition, the performance of our Asian flour mill investment continues to improve and we expect this trend to continue well into the future."
Mr Mencshelyi said the CBH Group was acutely aware of the need to carefully manage the business to minimise the long-term impacts of the current drought.
"There is a clear and determined focus throughout the CBH Group on ensuring the value of the organisation continues to grow," he said.
"We focus on value to ensure that the CBH Group maintains the ability to respond to any situation or opportunity that may present today, tomorrow or 15 years from now, in a way that best serves the growers of Western Australia.
"We are currently focused on enhancing the value in our storage and handling, marketing, and processing operations through ensuring co-ordinated strategies that are linked to the common goal of creating and capturing value for our growers.
Mr Mencshelyi said it was important to realise that the value chain strategy has not diverted the company's attention from its core business of storage and handling.
"Our commitment to storage and handling remains strong. Since 1999, the CBH Group has made some $393 million in profit. In that time, we have reinvested some $450 million into our receivals network," he said.
"Our ongoing challenge is to manage the increasing number of users of our network and the rising costs facing all of us in this industry.
"We have a responsibility to ensure all users of the network maintain the efficiencies that have formed the basis of our competitive advantage in Western Australia for so many years."
In his report to shareholders, CBH Group Chairman Tony Critch reflected on the events of the last 12 months and focused on the Board's continued commitment to improving and strengthening the business to ensure the long term survival and success of its grower shareholders.
"The past twelve months have been a challenging time for all Australian grain growers," Mr Critch said.
"At the end of the day, the CBH Group serves one master - Western Australian grain growers - and we have never and will never shy away from nor seek excuse from putting WA growers first."
Mr Critch said in going forward, the company will continue to pursue its strategy of growth for the future.
"To achieve our goals we must continue to pursue our strategy of growth, just like any other business, in order to sustain investment in our core business and the infrastructure and service levels growers experience today," he said.
"We firmly believe that creating value in the grains industry will come from capitalising on all segments of the business that link through to the customer."
