Ravensdown misses paying a rebate to farmers for the first time in 35 years as earnings slump
By Tina Morrison
Aug. 15 (BusinessDesk) – Ravensdown Fertiliser Cooperative, which supplies almost half New Zealand’s agricultural
fertiliser, will miss paying a rebate to its farmer shareholders for the first time in 35 years after drought and losses
from its Australian investments hit earnings.
Pretax profit slumped to $6 million in the 12 months to May 31, from $52 million the year earlier, the
Christchurch-based cooperative said in a statement. Sales slipped to $1.04 billion from a record $1.07 billion the year
Sales of the cooperative’s agricultural fertiliser fell 4.4 percent to 1.49 million tonnes as farmers pulled back
spending, faced with New Zealand’s worst drought in 70 years. Ravensdown is planning to exit its Australian joint
venture Direct Farm Inputs which sells fertiliser in South Australia and Victoria, as well as its fertiliser operations
in Western Australia, where a pre-tax loss of $23 million weighed on earnings.
“This unacceptable result has already prompted decisive action,” chairman Bill McLeod said in a statement. “We have
initiated a wide-ranging strategic review with the aim of freeing up capital, reducing risk, improving operating profit
and lowering our debt position.”
Ravensdown said in February it was in talks with its joint venture partners to sell its half stake in Adelaide-based
Direct Farm Inputs after the business moved to selling through intermediaries, rather than direct to farmers, limiting
the prospects for developing a cooperative model.
Last month, Ravensdown said it was also in talks to sell its fertiliser operations in Western Australia after four years
of losses since entering the market in 2008 as sales volumes and margins are crimped by drought, the global financial
crisis and volatile grain prices.
The cooperative estimates its assets yet to be sold are worth $134 million, the majority of which are stock and debtors.