November 11, 2010

AWB posts US$55-million net loss for 2010

Australia's grains marketer AWB Ltd has posted a net loss for fiscal 2010 of AUD54.9 million (US$55.0 million), as it prepares to be sold off to Canadian fertiliser producer Agrium.

AWB also posted lower profit before tax than forecast, of AUD79.3 million (US$79.8 million), after forecasting a result of AUD85-110 million (US$85.5-110.6 million) at its half year results announcement.

The unaudited results took into account significant items including settlement of the so-called Watson class action, where more than 1,000 shareholders sought compensation for AWB's failure to disclose Iraqi kickbacks. Settling the Watson action cost the company AUD39.5 million (US$39.7 million).

AWB also took an AUD69.8-million (US$70.2-million) hit on the sale and restructuring costs associated with the sale of the Landmark Financial Services loan and deposit books.

The company declared no dividend.

Managing director Gordon Davis said the overall performance of the continuing business was "solid", but AWB's Australian Commodity Management business had underperformed due to significantly reduced margins within the Grain Marketing unit.

AWB said its Grain Marketing business was well positioned to participate in long-term global growth in soft commodities from Australia.

Australian wheat was relatively uncompetitive with grain from Western Europe and the US until June 2010, reducing marketing opportunities, AWB said.

Falls in profits from wheat marketing were offset partly by strong performances in barley and oilseeds, the company said.