Transcript This is an example

Andrew Lindberg
Managing Director
Content:
• Result highlights
• Financial performance
(CFO)
• Business streams
• Global wheat market & outlook
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
Paul Ingleby
Chief Financial Officer
Content:
• Statement of financial performance
• Cashflow
• Capital expenditure
• Statement of financial position
Statement of financial performance
For the 6
months ended
For the 6
months ended
31-Mar-03
31-Mar-02
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%
2.8
1.9
47%
Operating profit before tax
42.8
109.2
(61%)
Net profit
29.9
77.1
(61%)
$million
Share of net profit of associates
Change
Cashflow
$million
Operating profit before tax
Tax paid
For the 6
months ended
31-Mar-03
42.8
(39.2)
Depreciation & amortisation
12.2
Working capital changes
19.3
Increase in net cash & short term deposits
Purchase of non-current assets
Purchase of investments
(195.1)
(49.1)
(121.7)
Dividends paid
(30.2)
Net new equity
1.9
Decrease in loan book
Increase in debt
250.1
(109.0)
Capital expenditure
$million
For the 6
months ended
For the 6
months ended
31-Mar-03
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%
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
52.8
18.4
2,735.5
3,422.6
121.1
188.6
1,746.6
2,355.8
8.8
47.3
43.1
41.5
1,919.6
2,633.2
815.9
789.4
Other
Liabilities
Payables
Interest bearing liabilities
Provisions
Other
Net Assets
Business operations
$million
For the 6
months ended
For the 6
months ended
31-Mar-03
31-Mar-02
Change
Pool Management Services
8.3
1.8
361%
Grain Acquisition & Trading
15.0
52.5
(71%)
Grain Technology
(2.5)
(0.9)
178%
2.8
22.5
(88%)
(18.6)
(10.4)
35.5
50.7
(30%)
2.3
(7.0)
133%
Operating profit before tax
42.8
109.2
(61%)
Net profit after tax
29.9
77.1
(61%)
Supply Chain & Other Investments
Interest expense
Finance & Risk Management
Corporate
79%
Business operations
$million
Pool Management Services
For the 6
months ended
For the 6
months ended
31-Mar-03
31-Mar-02
Change
8.3
1.8
361%
Grain Acquisition & Trading
15.0
52.5
(71%)
Grain Technology
(2.5)
(0.9)
178%
2.8
22.5
(88%)
(18.6)
(10.4)
35.5
50.7
(30%)
2.3
(7.0)
133%
Operating profit before tax
42.8
109.2
(61%)
Net profit after tax
29.9
77.1
(61%)
Supply Chain & Other Investments
Interest expense
Finance & Risk Management
Corporate
79%
Opportunities to develop markets
As part of AWB’s strategic objective of strengthening its
core wheat business, AWB is using its competitive
advantage to develop various markets, including:
Egypt
Tanzania
Morocco
Egypt – record volumes in 2001-02
• AWBI achieved the highest volume sold to the Egyptian market
since 1992-93 for the 2001-02 AWB National Pool
• Driven by record sales to the General Authority for Supply
Commodities (GASC) with the highest volume sold since 1992-93.
• Sales to GASC consistently out-performed the WIB
• Australian market share has significantly increased from 16% to
24% since 1992-93, whilst US market share declined from 72% to
55%
• AWBI shipped over 1 million tonnes ASW to GASC versus the
nearest competitor grade, SWW, where only 120,000 tonnes was
shipped
Tanzania – exclusive supply agreement
• AWBI successfully negotiated a long term supply commitment for 2003 with
the largest miller in Tanzania, Said Salim Bakhresa & Co. (SSB) which
represents 80% of the domestic Tanzanian market
• This agreement strengthens the relationship between the two organisations
to incorporate other revenue opportunities such as chartering and joint
venture opportunities
• The benefit for SSB is that they have secured supply for their mills and
logistics to their silos and can focus on other areas of their business
• The benefit for AWB is that the maximum tonnage allocated to the market is
secured to a strategically important long term customer
• AWBI has shipped over 200,000 tonnes which would have previously been
imported from the US, Canada and Argentina
Morocco – seven continuous shipments
• AWBI has successfully entered Morocco with seven
continuous shipments of APW
• 200,000 tonnes have been shipped which would have
previously been imported from Canada
• AWBI intend to target Morocco again and continue to
build on this success with the expectation of a larger
Australian wheat crop for the 2003-04 season
Business operations
$million
Pool Management Services
For the 6
months ended
For the 6
months ended
31-Mar-03
31-Mar-02
Change
8.3
1.8
361%
Grain Acquisition & Trading
15.0
52.5
(71%)
Grain Technology
(2.5)
(0.9)
178%
2.8
22.5
(88%)
(18.6)
(10.4)
35.5
50.7
(30%)
2.3
(7.0)
133%
Operating profit before tax
42.8
109.2
(61%)
Net profit after tax
29.9
77.1
(61%)
Supply Chain & Other Investments
Interest expense
Finance & Risk Management
Corporate
79%
Business operations
$million
For the 6
months ended
For the 6
months ended
31-Mar-03
31-Mar-02
Change
Pool Management Services
8.3
1.8
361%
Grain Acquisition & Trading
15.0
52.5
(71%)
Grain Technology
(2.5)
(0.9)
178%
2.8
22.5
(88%)
(18.6)
(10.4)
35.5
50.7
(30%)
2.3
(7.0)
133%
Operating profit before tax
42.8
109.2
(61%)
Net profit after tax
29.9
77.1
(61%)
Supply Chain & Other Investments
Interest expense
Finance & Risk Management
Corporate
79%
Business operations
$million
For the 6
months ended
For the 6
months ended
31-Mar-03
31-Mar-02
Change
Pool Management Services
8.3
1.8
361%
Grain Acquisition & Trading
15.0
52.5
(71%)
Grain Technology
(2.5)
(0.9)
178%
2.8
22.5
(88%)
(18.6)
(10.4)
35.5
50.7
(30%)
2.3
(7.0)
133%
Operating profit before tax
42.8
109.2
(61%)
Net profit after tax
29.9
77.1
(61%)
Supply Chain & Other Investments
Interest expense
Finance & Risk Management
Corporate
79%
Business operations
$million
For the 6
months ended
For the 6
months ended
31-Mar-03
31-Mar-02
Change
Pool Management Services
8.3
1.8
361%
Grain Acquisition & Trading
15.0
52.5
(71%)
Grain Technology
(2.5)
(0.9)
178%
2.8
22.5
(88%)
(18.6)
(10.4)
35.5
50.7
(30%)
2.3
(7.0)
133%
Operating profit before tax
42.8
109.2
(61%)
Net profit after tax
29.9
77.1
(61%)
Supply Chain & Other Investments
Interest expense
Finance & Risk Management
Corporate
79%
Business operations
$million
For the 6
months ended
For the 6
months ended
31-Mar-03
31-Mar-02
Change
Pool Management Services
8.3
1.8
361%
Grain Acquisition & Trading
15.0
52.5
(71%)
Grain Technology
(2.5)
(0.9)
178%
2.8
22.5
(88%)
(18.6)
(10.4)
35.5
50.7
(30%)
2.3
(7.0)
133%
Operating profit before tax
42.8
109.2
(61%)
Net profit after tax
29.9
77.1
(61%)
Supply Chain & Other Investments
Interest expense
Finance & Risk Management
Corporate
79%
AWB will continue supplying Iraq
• Wheat supply is continuing via the UN Oil-For-Food program
under direction from the World Food Program
• Indications are that the UN Oil-For-Food program, or similar will
be extended beyond 3rd June 2003 and 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
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
(mt)
620
(mt)
250
610
200
600
590
150
580
570
• Carryover stocks are at
relatively low levels,
representing approximately
three months supply.
• Production in other major
exporting countries are forecast
to increase
100
560
550
50
540
530
0
2000-01
2001-02
2002-03(f) 2003-04(z) 2004-05(z)
World Production
World Consumption
World stocks (ending)
(f) = forecast. (z) = projection. Source: ABARE 2003
Global export market share 2003-04
• 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 nontraditional exporters in 2003-04
All other
20%
USA
26%
Argentina
9%
EU
15%
Canada
14%
Australia
16%
(above figures are forecasts). Source: USDA May 2003
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
(mt)
14
2001-02
12
2002-03(e)
10
2003-04(f)
8
6
4
2
0
Russia
Ukraine
Kazakhstan
Eastern
Europe
India
Pakistan
(e) = estimate. (f) = forecast. Source: USDA May 2003
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
QUESTIONS
www.awb.com.au
For more information contact:
Delphine Cassidy
Head of Investor Relations
Ph:
+61 3 9209 2404
Email: [email protected]