AWB H1 profit falls 62 percent on drought, poor Brazilian performance

AWB Ltd., Australia's former monopoly wheat exporter, reported its first-half profit falling by 62 percent driven by dry weather and a "poor performance" at its Brazilian unit.

Net income dropped to A$8.5 million (US$6.6 million), or 2.42 cents a share, in the six months ended March 31, from A$22.2 million, or 6.39 cents a share a year earlier, the company said in a statement. AWB said on May 12 profit may be between A$8 million and A$9 million.

The lingering drought in Australia, the world's fourth-largest wheat exporter, trimmed sales at its Landmark rural unit, which sells farm merchandise such as fertilizer, seeds and livestock. The company looks forward to an improved second-half, Chief Executive Officer Gordon Davis said.

Davis said the first half was impacted by ''continuing adverse seasonal conditions in parts of rural Australia, weak demand for fertilizer and a poor performance by our operations in Brazil." The company is looking forward to an improvement in the second-half, which is traditionally stronger.

Earnings before interest, tax, depreciation and amortization at its Brazil unit swung to a loss of A$22.3 million, AWB said today in a presentation. Earnings fell 72 percent at the Landmark rural services unit, it said.

The company won't pay a first-half dividend, compared with the 4 cents paid a year earlier. "The board envisages that the company will pay a final dividend, however, this will not be determined until the end of the financial year when the full- year results are known and the outlook for 2009/10 is clearer," the company said.