Ballance reports record profits

Fertiliser manufacturer and distributor Ballance Agri-Nutrients has returned to record profit levels on the back of a buoyant farming industry.
And Ballance's farmers/shareholders are smiling, receiving their best ever dividend and standard rebate of $50.29 for every tonne of fertiliser they bought.
Those farmers investing in higher-value products such as Di-ammonium phosphate (DAP), triple superphosphate and potash will receive an even higher rebate and dividend of $62 a tonne; and those buying urea get more than $54 a tonne.
Mount Maunganui-based Ballance, the country's biggest fertiliser producer, reached an operating profit of $85.9 million for the 2010/11 financial year ending May, more than three times the previous year's. It had record sales in March this year.
Ballance, which stumbled in 2008/09, bettered the previous best year's profit of $78.56 million in 2007-08. The next year Ballance slumped to a $6 million loss after demand fell in the global financial crisis and it was left holding too much stock. But the co-operative had a quick turnaround by reporting $20.8 million profit for the 2009/10 financial year.
Chairman David Graham said that after a late spring and a slow start to summer, "we saw farming confidence improve, helped along initially by good returns in the dairy sector. We then saw demand increase sharply through autumn with the red meat sector enjoying much better prices. This optimism meant that farmers were prepared to spend on fertiliser to make the most of good growing, and market conditions."
Ballance's total sales hit 1.39 million tonnes, 19 per cent up on the previous year and just short of the 1.54 tonnes achieved in 2007/08. Total revenue in 2010/11 increased 9.7 per cent to $760.1 million, up on $651 million in 2007/08.
Ballance has reduced its debt from $91 million to $38 million, and its directors will recommend to shareholders at the September annual meeting in Napier that the share price be increased from $7 to $7.50, adding another $16.2 million of value.
Chief executive Larry Bilodeau said holding fertiliser prices through the autumn period, therefore buffering shareholders from any international (commodity) price rises, also contributed to the good year-end result.
"Like everyone, we faced higher fuel prices, and with larger sales volumes the cost of freight increased. We have worked hard to be more efficient and we will be keeping up the discipline to ensure we control the costs we can influence," said Mr Bilodeau.
Ballance was able make investments and grow its business. It recently bought Seales Winslow and now meets farmers' complete animal nutrient needs from pasture/fertiliser to feed supplements.
Ballance also bought 51 per cent of Farmworks Systems and added its own farm management portal, Ag-Hub, to the products and services it sells to farmers.
Ag-Hub was recently awarded the "Best of the best" prize in the New Zealand Telecommunications Users Association's (Tuanz) Innovations Awards.
Tuanz said with its scope to go international, Ag-Hub showed New Zealand was continuing to take the lead in the farming sector.
Information from on-farm recording devices such as feed readers, effluent irrigators, moisture tapes and weather stations is transmitted to Ag-Hub through the wireless farm network, FarmNet.
Farmers can use the tool to generate reports on pasture cover, yield mapping, fertiliser requirements, water use, soil moisture and temperature, effluent nutrients, application rates, and weather and animal weights.