CBH records $11m surplus

CBH Group revenue fell by 23 per cent to $3.2 billion in the year to September 2020, citing below average harvest and international trade tensions, but still achieved an overall profit.

The group released its 2020 annual report today, recording a surplus and net profit after tax of $11 million.

CBH chief financial officer Doug Warden said 2020 saw a great year of volatility and uncertainty caused by ongoing trade tensions, COVID-19, as well as below average harvest.

The group received its smallest harvest since 2012-13 – 9.8 million tonnes, impacting revenue for the operations division, leading to a net loss of $10.9 million.

The drop in grain sales resulted in CBH dropping to tenth position on the Business News Data & Insights list of the state’s biggest exporters.

“Overall CBH remains in a strong financial position with net assets totalling $1.8 billion and no long-term debt,” Mr Warden said.

“We continue to invest significantly in the network with $226 million spent on capital projects and maintenance.”

That included completing three expansion projects at Konnongorring, Moora and Watheroo and approximately 200 sustaining capital projects.

Over the year, CBH reduced its net debt from $295 million to $6.7 million.

The group recorded marketing and trading net profit after tax of $12.2 million, backed by a strong performance in the group’s investment portfolio including the Interflour Group and Blue Lake Milling, partly offset by the impact of below average harvest.

CBH chief executive Jimmy Wilson said given the headwinds experienced across the business, the 2020 results represented a good outcome for the business.

“We responded quickly to the challenges presented through the year to keep the supply chain operating, developed new and existing markets for Western Australian grain, and continued to return value to our growers,” Mr Wilson said.

“Our strong financial position was maintained, while keeping our supply chain fees the lowest in the country, now approximately $20 per tonne less than interstate bulk handlers as a result of the $4 per tonne reduction in fees in WA in 2018-19.”

CBH said it had 40 per cent market share of Australian bulk grain exports and that the division had maintained its status as Australia’s largest grain exporter.

“The conclusion of the China anti-dumping investigation into Australian barley resulted in the unfortunate loss of our largest barley market, and the team has worked hard to find new markets for WA barley,” Mr Wilson said.

“Marketing and Trading is well positioned to continue rebuilding equity in the business and navigate the challenges of ongoing trade tensions and the continuing impact of COVID-19 in other parts of the world.

“The positive financial result for Marketing and Trading was also supported by the division’s strong performance from its grower finance, pools and Swaption products.”

The group’s fertiliser business increased sales, representing the fifth year of successive growth, with tonnes sold rising by 21 per cent.

“As always we continue to be focused on the core of our business, which is returning value to Western Australian growers by providing an efficient and effective storage and handling position,” Mr Wilson said.  

“Right now we’re in a good financial position with a strong balance sheet and mindful of controlling our costs for the year.”