june 2003 awb limited. 2003 half-year results impacted by drought net profit after tax of $29.9m,...
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![Page 1: June 2003 AWB Limited. 2003 Half-year results impacted by drought Net profit after tax of $29.9m, down 61% Total operating revenue of $1.03b, down 34%](https://reader033.vdocuments.net/reader033/viewer/2022051515/551bce37550346b9588b52ff/html5/thumbnails/1.jpg)
June 2003
AWB Limited
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2003 Half-year results impacted by drought
• Net profit after tax of $29.9m, down 61%
• Total operating revenue of $1.03b, down 34%
• Earnings per share of 10.9 cents, down 61%
• Interim dividend of 14 cents per share
• Drought impacted wheat crop of 9.7 million tonnes
• Loan book peaked at $1.6b in December 2002
• Gross Pool Value at $1.3b
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Statement of financial performance
$million
For the 6 months ended
31-Mar-03
For the 6 months ended
31-Mar-02 Change
Revenue from ordinary activities 1,030.3 1,559.7 (34%)
Cost of sales (883.0) (1,354.1) (35%)
Borrowing costs (42.7) (42.3) 1%
Depreciation & amortisation (12.2) (5.6) 118%
Other (52.4) (50.4) 4%
Share of net profit of associates 2.8 1.9 47%
Operating profit before tax 42.8 109.2 (61%)
Net profit 29.9 77.1 (61%)
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Cashflow$million
For the 6 months ended
31-Mar-03
Operating profit before tax 42.8
Tax paid (39.2)
Depreciation & amortisation 12.2
Working capital changes 19.3
Increase in net cash & short term deposits (195.1)
Purchase of non-current assets (49.1)
Purchase of investments (121.7)
Dividends paid (30.2)
Net new equity 1.9
Decrease in loan book 250.1
Increase in debt (109.0)
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Capital expenditure
$million
For the 6 months ended
31-Mar-03
For the 6 months ended
31-Mar-02 Change
Grain centres construction 40.7 8.6 373%
System Development &
Other Plant & Equipment
8.4 18.3 (54%)
Total 49.1 26.9 83%
Depreciation 12.2 5.6 118%
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Statement of financial position$million As at 31-Mar-03 As at 31-Mar-02
Assets
Cash 61.9 11.7
Receivables 1,721.3 2,987.1
Investments 381.8 109.9
Inventories 310.8 169.3
Property, plant & equipment 206.9 126.2
Other 52.8 18.4
2,735.5 3,422.6
Liabilities
Payables 121.1 188.6
Interest bearing liabilities 1,746.6 2,355.8
Provisions 8.8 47.3
Other 43.1 41.5
1,919.6 2,633.2
Net Assets 815.9 789.4
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Business operations
$million
For the 6 months ended
31-Mar-03
For the 6 months ended
31-Mar-02Change
Pool Management Services 8.3 1.8 361%
Grain Acquisition & Trading 15.0 52.5 (71%)
Grain Technology (2.5) (0.9) 178%
Supply Chain & Other Investments 2.8 22.5 (88%)
Interest expense (18.6) (10.4) 79%
Finance & Risk Management 35.5 50.7 (30%)
Corporate 2.3 (7.0) 133%
Operating profit before tax 42.8 109.2 (61%)
Net profit after tax 29.9 77.1 (61%)
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Outlook• AWB is forecasting full-year NPAT result in the range of $40-
$45m
• AWB has forecast 2003-04 wheat production between 22-24mt, around 10-15% above the 5 year average. The 2002-03 El Niño is officially finished
• Stable dividend payment for 2002-03 despite reduction in earnings. The Board intends to maintain a stable dividend policy
• Strategic investment in Futuris Limited
• Capital management and ring fencing
• Expand Finance and Risk Management products
• Further growth and diversification – aim to be less than 80% reliant on the wheat crop by end of 2004
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Global supply and demand
• 2003-04 world wheat production
is forecast to rebound strongly
following a 5% fall in 2002-03
due to limited production in
Australia, Canada and US
• Carryover stocks are at
relatively low levels,
representing approximately
three months supply.
• Production in other major
exporting countries are forecast
to increase
530
540
550
560
570
580
590
600
610
620
2000-01 2001-02 2002-03(f) 2003-04(z) 2004-05(z)
(mt)
0
50
100
150
200
250(mt)
World Production
World Consumption
World stocks (ending)
(f) = forecast. (z) = projection. Source: ABARE 2003
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Global export market share 2003-04
EU15% Canada
14%
Argentina9%
All other20%
Australia16%
USA26%
• Australian, Canadian and US wheat crops expected to rebound significantly
• 2003-04 total exports by major exporting countries forecast to increase to 79.3mt, an increase of 17mt from 2002-03
• Major wheat exporting countries continue to face competition from non-traditional exporters in 2003-04
(above figures are forecasts). Source: USDA May 2003
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Non-traditional exporters• Non-traditional exporters have increased their export program over the last
two years due to good production, large carryover stocks and increased investment in transport and infrastructure
• However, some of these exporters will produce significantly lower tonnage in 2003-04, reducing total exports by non-traditional exporters to only 13.2mt compared with 34.9mt in 2002-03
0
2
4
6
8
10
12
14
(mt)
Russia Ukraine Kazakhstan EasternEurope
India Pakistan
2001-02
2002-03(e)
2003-04(f)
(f) = forecast. (e) = estimate
Source: USDA May 2003
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Key issues
• Iraq
• Strategic investment in Futuris
• Senate inquiry into WEA Funding
• Future of the Single Desk system
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AWB will continue supplying Iraq
• Wheat supply is continuing via the UN Oil-For-Food program under direction from the World Food Program
• The UN Oil-For-Food program has been extended to September 2003
• The UN and the US administration will continue to honour contracts previously awarded
• Australian wheat is widely used and recognised throughout the Middle East region as a clean quality white wheat
• Australia has been supplying Iraq with this wheat for more than 54 years. AWB expects to retain a strong market share in Iraq in the future
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Strategic investment in Futuris
• AWB currently owns 14.2% in Futuris – we are the largest single shareholder
• The primary objective is to maximise the value of our investment and to pursue opportunities with Elders (namely, their distribution network)
• In order to increase stake above 15%, we have lodged an application to the Treasurer.
• We expect a decision to be made by the end of June 2003
• This is all about keeping our options open
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Senate inquiry into WEA Funding
• The main purpose of the amendment to the Bill is about the ongoing funding to support the continuing operation of the WEA
• However, the process has given a forum to the anti Single Desk campaigners; trying to dismantle the Single Desk
• AWB has participated and cooperated fully with the inquiry
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Single Desk
• The 2004 WEA Review is limited to a review on AWBI’s performance as manager of the Single Desk
• It will not incorporate National Competition Policy (NCP) principles or the broader industry issues
• The Single Desk system legislation will be reviewed in 2010 under the NCP principles
• This was confirmed by Minister Truss at the Grains Week conference in March 2003.
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QUESTIONS
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For more information contact:
Delphine Cassidy
Head of Investor Relations
Ph: +61 3 9209 2404
Email: [email protected]
www.awb.com.au