Mixed results for Ravensdown

One of the state's largest co-operatives, Ravensdown has recorded mixed results for the end of financial year, increasing its Australian sales by 54 per cent but recording $4.8 million loss from operating activities.

Sales for the Australian business increased by 82,000 tonnes on the previous financial year, however the business faced a number of one-off issues which resulted in it making a loss from operating activities.

"This was a reversal of the previous year where the $12 million Australian result from operating activities gave significant support to the overall business reinforcing the benefits of a trans-Tasman co-operative," said Ravensdown chairman Bill McLeod.

In a statement Ravensdown said the loss in WA was due to a combination of two major one-off factors including costs incurred with the grounding of a fertiliser shipment in Morocco earlier this year, and stock impairment on fertiliser and ag chemical products as a result of commodity prices continuing to fall.

"The increase in sales reflects Ravensdown's move to help farmers put on important nutrients by passing on substantial price reductions as world commodity prices fell during the year," said Mr McLeod.

The Co-operative's before tax profit was $22 million and it is returning $14 million to shareholders through a rebate of $10.40 per tonne.

On top of the rebate Ravensdown will also be rewarding loyal shareholders through the Western Australian Shareholder Incentive Scheme.

Under the scheme, for purchases between 2008 and 2011 Western Australian shareholders receive an incentive of $25, $25, $17, $17 in shares per tonne as long as targeted sales are achieved.

Sales for the Australian business increased by 82,000 tonnes on the previous financial year, however the business faced a number of one-off issues which resulted in it making a $4.8 million loss from operating activities.

The loss in Western Australian was due to a combination of two major one-off factors including costs incurred with the grounding of a fertiliser shipment in Morocco earlier this year, and stock impairment on fertiliser and ag chemical products as a result of commodity prices continuing to fall.

See full company statement below:

Ravensdown today reported a solid financial result for the year ended 31 May 2010.

Sales in Australia increased by 54% and 13% in New Zealand to a total of 1.299m tonnes. The increased support from Western Australian farmers to the Co-operative is extremely pleasing, says Ravensdown Chairman Bill McLeod.

"The increase in sales reflects Ravensdown's move to help farmers put on important nutrients by passing on substantial price reductions as world commodity prices fell during the year."

The Co-operative's before tax profit was A$22m and it is returning A$14m to shareholders through a rebate of A$10.40 per tonne. "Ravensdown is pleased to again deliver shareholders a good rebate, as we have done every year since Ravensdown was first created by farmers in 1977."

On top of the rebate Ravensdown will also be rewarding loyal shareholders through the Western Australian Shareholder Incentive Scheme. Under the scheme, for purchases between 2008 and 2011 Western Australian shareholders receive an incentive of $25, $25, $17, $17 in shares per tonne as long as targeted sales are achieved.

This is the second year the scheme has been paid in full and will see an allocation of A$25 in Ravensdown shares per tonne of fertiliser collected by Western Australian shareholders between 1 June 2009 and May 31 2010.
"We're delighted to deliver on the incentive scheme again for the second year, as a direct result of the support we've received," Mr McLeod says.

Marked improvement in operating activities result

"A strong result of A$35m from operating activities is a marked increase on the A$8m achieved in the 2008-2009 year," he says.
Sales for the Australian business increased by 82,000 tonnes on the previous financial year, however the business faced a number of one-off issues which resulted in it making a A$4.8m loss from operating activities.

"This was a reversal of the previous year where the A$12m Australian result from operating activities gave significant support to the overall business reinforcing the benefits of a trans-Tasman co-operative," says Mr McLeod.
The loss in Western Australian was due to a combination of two major one-off factors including costs incurred with the grounding of a fertiliser shipment in Morocco earlier this year, and stock impairment on fertiliser and ag chemical products as a result of commodity prices continuing to fall.

Ravensdown's Queensland business completed its first full year of operation in a profitable position with a healthy balance sheet and good cashflows. "The level of support we've received from farmers and growers means we can accelerate our five year establishment plan in the State," he says.
Ravensdown's overall financing costs reduced significantly compared to the challenging 2008-09 year reflecting a positive operating cashflow of A$102m (-A$17m in 2008-09) reducing the Co-operative's working capital requirements.

Looking forward
"Despite one-off issues in Western Australia this year, we continue to demonstrate the benefits of the trans-Tasman operation. We have experienced economies of scale through sourcing, inventory management between Australia and New Zealand, and we are now importing significant quantities of superphosphate from New Zealand," says Mr McLeod.

"We fully understand that our Western Australian shareholders have different requirements and we will seek to increase the value of our offer to you."