Ravensdown to pay farmer rebate as profits surge
Ravensdown Fertiliser Cooperative will resume paying farmers a rebate this year after its earnings jumped some 161 percent after it quit an unprofitable Australian business.
Profit before tax and rebate from continuing operations rose $73 million in the year ended May 31, from $28 million the previous year, the Christchurch-based cooperative said in a statement. Trading profit rose to $46 million from $6 million a year earlier, which was impacted by the cost from quitting Australia. Ravensdown will pay shareholders $37.78 per tonne, made up of $15 in rebate and fully imputed bonus shares worth $22.38.
The cooperative didn't pay farmers a rebate in 2013, for the first time it missed such a payment in 35 years, after selling its stake in Australian joint venture Direct Farm Inputs, causing a pretax loss of $23 million. Ravensdown has now exited all Australian operations to focus on New Zealand, where tonnages rose 7 percent this year, reflecting increased farming production and confidence resulting in rising fertiliser needs, it said.
"Because of the actions taken since 2012-13 as part of a new strategy, the cash, debt and profit positions have been significantly improved," chairman John Henderson said. "On top of this strengthening balance sheet, we are transitioning to a more flexible forex policy which we anticipate will make a positive contribution to our current year's performance."
Net debt fell to $49 million from $249 million, its lowest debt level in a decade, Henderson said. Operating cashflow was $185 million and its equity ratio rose to 65 percent from 49 percent.
Ravensdown will outline plans to reinvest in the core business at its Sept. 15 annual meeting in Marton.