AWB Ltd has reported a net after-tax loss of $250.8 million for the year to September 30, 2009, on revenue that totalled $6686.7 million, but it remains bullish about prospects for 2009-10.
However, AWB reported a good result for the first year of wheat trading in which it no longer had single desk bulk wheat export powers.
Managing director, Gordon Davis, said the company's combined cash and pool business had acquired more than 25 per cent of 2008-09 national wheat production, benefiting from strong relationships with growers and customers.
He attributed the loss to the discontinuing businesses of AWB Brazil and Hi-Fert, significant goodwill impairment for Landmark Financial Services, and a write down in Hi-Fert and other significant items relating to restructuring and legal costs associated with "legacy" issues.
"In a year where the financial and climatic environment remained particularly challenging the performance of AWB was mixed, affected by the availability and cost of credit, lower input margins, a rising Australian dollar, decreasing commodity prices, weak demand for fertiliser and adverse seasonal conditions on the east coast of Australia."
He said the continuing Landmark and Commodities Management businesses had recorded a profit before tax and significant items of $93 million.
Mr Davis forecast a before tax and significant items profit for 2009-10 of $95-115m, and that was before taking into account the recent capital raising that would generate interest savings of $20-25m.
He said the company had set the platform for more sustainable growth by reducing its corporate debt by more than $250m and implementing cost reduction initiatives.
The proceeds of the capital raising had further reduced debt, strengthened the balance sheet and significantly improved financial flexibility.
He said AWB Geneva had performed particularly strongly with freight, grain and oilseeds businesses all improving substantially on the previous year.
However, Landmark Rural Services (excluding Hi-Fert) had produced a lower performance because of reduced prices for most agricultural products, lower margins in crop chemicals and fertilisers, and dry conditions across most of south-east Australia.
Landmark's livestock business had produced a solid result with improved prices and volumes, and the successful start-up of Landmark Global Exports had resulted in exports of about 20,000 dairy cattle and 9000 beef cattle to Indonesia.
He said the wind-down of AWB Brazil was "well progressed".
A repayment profile for debt with banks had been negotiated, the sale of key assets had started and the operational wind-down was well under way.
Mr Davis said negotiations for the sale of Hi-Fert, jointly owner with Elders, were progressing constructively.
He said AWB had made substantial progress on its four strategic objectives - a simpler lower risk business, sustainable earnings profile, streamlined debt profile and a customer centric approach.
"Australian agriculture remains an attractive industry segment due to Australia's close proximity to growth markets in Asia and we are well placed to take advantage of agribusiness opportunties going forward," he said.
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