A SURPLUS of $353 million for the year to September 30 was recorded by Western Australia’s CBH Group, down 29 percent from $498M in FY22, despite CBH’s intake of 22.9Mt in the 2022-23 harvest breaking the record set in 2021-22 of 21.3Mt, the co-operative said in its 2023 annual report released today.
“Critically, it was also the first time in the co-operative’s 90-year history that we outturned a record 21.9Mt to our international and domestic customers, with both records allowing CBH Operations to achieve its largest ever surplus of $156.1M,” CBH chief executive officer Ben Macnamara said.
Outturn in FY23 was well up on the FY22 record of 18.1Mt, and saw the supply chain ship a record 19.7Mt from CBH’s four port terminals.
Rail performance significantly improved during the year, with Aurizon helping to move a record 11Mt.
CBH invested a record $572.7M into the network, including entering into three agreements that will significantly bolster the existing rail fleet by 24 locomotives and 650 wagons.
As part of this network investment, good progress was made on 11 rail outloading and siding projects, including the completion of the Brookton rail siding project and the start of construction at the Broomehill rapid rail outloading project.
During the year, 436,000t of permanent storage and 2.3Mt of temporary storage was added to the CBH network, and a record $173.6M was invested in more than 230 sustaining capital projects to ensure the longevity and functionality of network assets.
CBH Marketing & Trading reported a surplus of $176.3M, driven by increased export margins early in the year, a second consecutive record harvest in WA, and the reopening of the China barley market.
During the year, M&T bought 43pc of the record WA crop and paid $4.8B to WA growers, while shipping 8.9Mt of grain, including 500,000t from South Australia, down from a total 9.8Mt in FY22.
Looking ahead, Mr Macnamara said CBH was focused on achieving its Path to 2033 Strategy.
“By 2033, we want to increase how much we export to a peak of 3Mt a month and critically, be able to outturn 70pc of the crop in the first half shipping window to maximise the value of WA growers’ grain.”
“Although we are having a smaller harvest this year, we project that over the coming decade the average crop size will continue to increase.”
Solid division results
CBH Fertiliser sold a record 232,000t of product in FY23 from sites including the new Kwinana Fertiliser Terminal, and entered the liquid fertiliser market.
The division also saw record sales of 50,000 from its Esperance facility, up from 29,800t in FY22.
“CBH Fertiliser now holds an 11pc market share in Western Australia, well on its way to achieving its Path to 2033 strategic goal of holding a 15pc market share, and more importantly, creating competitive tension in the market,” Mr Macnamara said.
CBH since 2004 has been part of the Interflour joint venture with the Salim Group.
Interflour now has nine flour mills in total located in Indonesia, Malaysia, The Philippines, and Vietnam, and uses more than 1.5Mt of wheat annually.
“Interflour faced a number of challenging conditions during the year, with its profit impacted by a challenging trading environment as a result of high grain prices,” CBH said in its annual report.
“This reduced flour margins as the higher cost of grain was not able to be recovered from increases in flour prices.
“Interflour also experienced two separate third-party incidents at the Vietnam Port, which resulted in physical damage and the shutdown of port operations.”
Interflour generated an after-tax profit for CBH of $100,000 in FY23.
Domestic oat processor Blue Lake Milling has operations in WA, South Australia and Victoria, and posted a more positive result, with a profit after tax of $4.3M, up from $3.6M in FY22.
This was despite sales volumes being slightly down on weaker demand for manufactured oats, particularly in the export market.
“The higher profit was mainly driven by the reduction in export freight rates since last year.”
With an abundance of ASW9 available from WA last harvest, CBH said it was able to increase its volumes to Indonesia, a long-term buyer of WA wheat for instant noodles, by 18pc from FY22 to more than 1Mt.
Source: CBH Group