Both New Zealand's fertiliser giants, Ballance and Ravensdown, have bounced back from flagging fortunes a year ago to now post solid results on the back of increased revenue.
Ballance had the most significant turnaround coming back from a $6 million pape
Both New Zealand’s fertiliser giants, Ballance and Ravensdown, have bounced back from flagging fortunes a year ago to now post solid results on the back of increased revenue.
Ballance had the most significant turnaround coming back from a $6 million paper loss last year after a $36.7 million write-down in the value of its unsold inventory.
During the previous year, fertiliser prices plummeted from record highs, which led Ballance to take the one-off hit to its balance sheet to enter the 2009/2010 year in a strong position.
This year Ballance was produced a $21 million profit that has resulted in a $17.14 a tonne rebate to shareholders, including a dividend.
Total sales rose by just over 5% to 1.2 million tonnes, compared with last year when farmers reduced their fertiliser application levels due to a combination of the high prices and the threat of a low dairy payout.
It was a similar story for Ravensdown, which saw sales rise 13% to 1.299 million tonnes.
As a result, the company produced $43 million from operating activities, up from $10 million last year.
This led to a before tax profit of $27 million with $17 million going back to shareholders with a $13 a tonne rebate.
However, the rebate is down from last year’s $15.10 a tonne.
Chairman Bill McLeod said the company has taken a prudent position on the new building depreciation tax introduced in the government’s 2010 budget, which result in a significant charge of $4.5 million.
Last year both companies were worried about falling fertiliser application rates, dropping below maintenance levels in many areas – a situation not seen for more than 20 years.
Ravensdown chief executive Rodney Green said the level of application has picked up from about 70% of maintenance level of 80%.
Both companies were expecting an improvement in fertiliser demand by spring.
