Australia's AWB expects seasonal pickup in 2H

Agribusiness AWB Ltd. expects a pickup in earnings in its fiscal second half starting April, when the performance of its rural merchandise and services Landmark unit is typically stronger, Managing Director Gordon Davis said Friday (February 13).

"We're confident given the relative health of the agri-sector in Australia that Landmark's performance will improve in normal seasonal conditions," he said in an investor briefing note.

Davis also said that because of the seasonal impact, the March working capital position typically is higher than in September.

But given falling commodity prices and improved management of working capital, he said he doesn't expect debt levels at March 31 this year to be "substantially higher than they were at the full year."

Moreover, the company remains confident that based on the updated earnings outlook for the fiscal first half, "we'll be able to meet all our covenants as at March 31," he said.

AWB's policy is to pay out 40 percent to 65 percent of net profit in dividends, and with first half profits expected to be down so will the dividend payment in dollar terms, "but as a percentage it should still fall within that range," Davis said.