Co-operative Bulk Handling has reported a record surplus, before rebates, of almost $248 million for the year ending September 2017.
The huge surplus, up by 120 per cent on a year earlier, was driven by WA’s biggest-ever 16.6 million tonne harvest and a disciplined approach to cost and capital management.
These strong results enabled CBH to pay a record rebate to growers of up to $12.75 per tonne, totalling $156.3 million, announced in September.
After accounting for the rebate, net profit after tax was $91.3 million, an increase of 83 per cent on the previous year.
Total revenue was $3.5 billion, ($3.8 billion including pool revenue), marking a 6.3 per cent increase from a year earlier. Although a larger number of tonnes was traded, this was partially offset by lower grain prices.
In terms of individual business units, CBH’s marketing and trading division traded 9.4 million tonnes and recorded a $58.3 million surplus before rebates.
Within this division, the group reported its fertiliser business continued to grow during 2016-17, with about 65,000 tonnes sold, up by 15,000 tonnes during 2015-16, which was its first full year of operation. This business contributed a loss of about $200,000, down from a $1.2 million loss a year earlier.
The operations division recorded a surplus before rebates of $197.6 million.
CBH chief executive Jimmy Wilson said the investment division, which includes Interflour and Blue Lake Milling, also recorded an improvement in profitability.
At Interflour Group, profits generated from the business had been reinvested in growth projects, including the $US70 million Intermalt facility in Vietnam and the $US30 million Mabuhay Interflour Mill in the Philippines.
Within the year, CBH invested $97.3 million in capital and maintenance works across the network, which included work as part of the co-operative’s five-year, $750 million Network Strategy.
CBH chief financial officer Ed Kalajzic said the 2016-17 financial performance meant CBH maintained a strong and sustainable balance sheet, with no long-term debt.
In his outlook, Mr Wilson said CBH would continue to focus on three key areas, including the continued reduction of paddock-to-port costs, to provide a competitive edge to growers in global grain markets.
He said there would be a continued drive to maintain market transparency, deliver more marketing and trading services to growers, and maximise returns from investments.
However with CBH expecting to receive and handle just more than 13 million tonnes in the current year, Mr Wilson said the 2017-18 surplus and rebates were unlikely to match last year’s records.