1 August 2013
Ballance pays record rebate after record performance
Ballance Agri-Nutrients shareholders are in line for a record rebate and dividend of $65/tonne, along with a recommended
60 cent increase in the value of their co-operative’s shares to $8.10.
The rebate averaging $60.83 per tonne and a fully imputed dividend of 10 cents per share will be paid out nearly six
weeks earlier during mid-August, with Ballance Chairman David Graham saying the payment has been brought forward to
reward shareholders and assist them with cash flows at the start of the season.
“The drought may be over but the financial impacts are not, so we are fast-tracking the payment for shareholders in
recognition of that so they can gain the full benefits of a good year for their co-operative as quickly as possible.”
Returns to shareholders will vary according to purchases, but based on an annual purchase of 100 tonnes, the rebate and
dividend represents a $6,500 return to a fully paid shareholder. In total, Ballance’s 18,300 shareholders will receive a
$65 million distribution. The recommended share value increase, driven by the co-operative’s strong balance sheet and
steady financial performance, will represent a $1,800 gain for a farmer holding 3,000 shares to cover 100 tonnes of
fertiliser purchases.
Mr Graham, who is retiring as Chairman in September, said Ballance has performed exceptionally well to achieve a record
trading result of $92.6 million despite the drought drying up fertiliser demand and impacting sales volumes. This
compares to the prior year result of $77.3 million. Group sales volumes at 1.33 million tonnes were 7.6% behind the
prior year, reflected in Group revenue at $878 million compared to the prior year’s $915 million.
“We are proud of the fact we have achieved a record result in a very trying year, and more importantly in a year in
which we held or reduced fertiliser prices. We started strongly, with a good first half, but the drought quickly took
its toll on demand. Despite this, we maintained a very good performance to deliver an excellent result. I can step down
as Chairman on a high note, knowing the co-operative is in excellent financial and operational shape.”
Chief Executive Larry Bilodeau said the co-operative’s ability to deliver a record result and rebate came down to a very
disciplined approach to costs right across the supply chain during a year in which prices were held steady.
“We managed purchasing well, achieving the stability in raw material pricing which enabled us to maintain steady prices
and in fact lead market prices down while achieving reasonable margins. We also kept overall costs under tight control,
supported by operating efficiencies.
“These include procurement savings in shipping and freight and competitive contracts for raw material purchases for
fertiliser production. Having Kapuni back on-stream for a full year meant lower import volumes, and this was another
contributor to the results.”
Within the animal feed division of the co-operative demand lifted as a result of the drought, however the revenues
generated did not offset the reduction in fertiliser sales which fell below budget in the final quarter because of the
dry conditions.
Mr Bilodeau said the co-operative was in sound financial shape with its equity ratio at a record high of 71.3% compared
to last year’s 64.2%. Net debt was down $90 million to $6 million.
“We are optimistic about the year ahead. The drought is behind us and farmer confidence is improving. We are seeing
positive signs across all sectors with the dairy payout forecasts looking good, improvements in dry stock prices, and a
lift in optimism in the cropping and horticulture sectors. Sales are steady at this early point in the new financial
year and we expect pricing to remain competitive.”
ENDS