July 28, 2006

Australian wheat exporter expects profits to drop 25 percent

Wheat exporter AWB Ltd has cut its forecast underlying profit before tax and amortisation (PBTA) for fiscal 2006 by up to 25 percent.

AWB also warned that forecast domestic wheat production for 2006/07 had been reduced to 18 to 20 million tonnes, from 23 to 25 million tonnes, following below average rainfall across Australia.

At its half year results in May, AWB Ltd forecast underlying PBTA for the year ended Sep 30, 2006, to be similar to that in the previous fiscal year.

The company said that estimate was based on normal seasonal and operational conditions. However, the current drought has caused lower than expected merchandise and fertiliser sales for the past 3 months.

AWB said its performance had also been affected by difficult trading conditions and volatile global markets.