15/08/2016 - 10:36

Wellard's profit outlook takes another hit

15/08/2016 - 10:36

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Perth-based agribusiness Wellard has warned the market of yet another profit downgrade, its third since February, with the Perth-based agribusiness now expecting a $15 million net profit at best.

Wellard's profit outlook takes another hit
Wellard managing director Mauro Balzarini. Photo: Attila Csaszar

Perth-based agribusiness Wellard has warned the market of yet another profit downgrade, its third since February, with the Perth-based agribusiness now expecting a $15 million net profit at best.

Wellard exited a 10-day trading halt this morning following the announcement that a number of adjustments relating to vessel spares inventory, insurance claims and tax had spurred the need to further reduce its net profit outlook to between $14 million and $15 million for the 2016 financial year.

That’s below its previous forecast of between $23.5 million and $30 million, which was already revised from an earlier downgraded estimate of $42.5 million.

In its prospectus last year, Wellard had been expecting a net profit of $46.4 million for FY16.

The company is also conducting a review of its assets to determine if any impairments are required.

“It has been a challenging six months for our company with a difficult trading environment and a number of unexpected events,” managing director Mauro Balzarini said.

“Despite this, Wellard has maintained its market position and increased market share in some countries and all our ships are currently being utilised.”

In a statement, Wellard said the latest downgrade resulted from $7.7 million in repairs needed on two of its vessels as a result of mechanical breakdowns earlier in the year.

Wellard has notified its insurer and is making a claim with respect to the breakdowns,” it said.

“The claim involves two ships and is complex and it is expected that it will not have advanced sufficiently to be included in the Wellard audited financial statements for FY16 at the end of August.

“Although Wellard is confident in the recovery, it is not in a position to say if the claim will succeed and if so for what amount, after the subtraction of deductibles.”

Wellard shares were 1.25 per cent lower to 39.5 cents each at 10:30am.

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