WESTERN Australian bulk handler CBH Group has posted a group surplus and net profit after tax of $11 million in the year to 30 September.
In releasing the figure today as part of its 2020 Annual Report, CBH Group chief executive officer Jimmy Wilson said the result was a good outcome given WA’s below-average 2019-20 harvest, COVID-19, and issues with China in relation to barley.
“We responded quickly to the challenges presented through the year to keep the supply chain operating, developed new and existing markets for Western Australian grain, and continued to return value to our growers,” Mr Wilson said.
“Our strong financial position was maintained, while keeping our supply chain fees the lowest in the country, now approximately $20 per tonne less than interstate bulk handlers as a result of the $4/t reduction in fees in WA in 2018-19.”
Marketing, trading profit
CBH Group’s Marketing and Trading arm recorded a net profit of $12.2M, representing a strong recovery from its substantial loss in 2018-19 result.
With 40 per cent market share of Australian bulk grain exports, the division maintained its status as Australia’s largest grain exporter.
Mr Wilson said the result was significant given global market factors during the year.
“The conclusion of the China anti-dumping investigation into Australian barley resulted in the unfortunate loss of our largest barley market, and the team has worked hard to find new markets for Western Australian barley.
“Marketing and Trading is well positioned to continue rebuilding equity in the business and navigate the challenges of ongoing trade tensions and the continuing impact of COVID-19 in other parts of the world.
Mr Wilson said Marketing and Trading’s result found further support from its grower finance, pools and Swaption results, and helped to offset results from operations.
Group revenue excluding pool revenue was $3.2 billion.
Operations recorded a net loss after tax of $10.9, and received its smallest harvest since 2012-13, with 9.8Mt delivered into the network, and 11.7Mt outturned to reduced stored grain inventory by close to 2Mt.
“In addition to improving site cycle times, our aim was to meet growers’ site service expectations which we did through the offering of 51 grades across 114 sites, with improved on-site, online and technical services,” he said.
Throughout 2019-20, CBH Group invested $226M in developing and improving its network, which included expansions at Konnongorring, Moora and Watheroo.
Improved demand saw CBH’s Interflour Group investment in Vietnam post a $6M net profit after tax, its best result in five years, and the domestic Blue Lake Milling oats operation posted a $2.7M profit.
Mr Wilson said CBH continued improvement in average site cycle times during the 2019-20 harvest saw it drop by six minutes to less than 40 minutes.
CBH’s fertiliser business increased its tonnes sold by 21pc over 2019-20 to mark its fifth successive year of growth.
“Reducing growers’ on-farm input costs is part of CBH’s core strategy, and the ongoing support and success of CBH Fertiliser has given us the opportunity to pursue options for its expansion in the near future,” Mr Wilson said.
Mr Wilson said the year to 30 September 2021 looked positive for CBH Group, which plans to continue developing the network and maximising the value of WA grain.
“CBH is in a strong financial position with net assets of $1.8 billion and no long-term debt which enables us to maintain elevated investment in improving the network and the fertiliser business.
“We will continue providing efficient and effective services, and low-cost inputs for growers, while responding to any potential impacts of COVID-19 and strengthening markets for Australian grain with a focus on South East Asia and the Middle East.”
Source: CBH Group
HAVE YOUR SAY