Ravensdown Fertiliser is returning $18.4 million of its $19 million after-tax profit to shareholders through a rebate on purchases from the cooperative.
The profit for the year to May 31 is down on the $21 million in 1999, although an estimated $3.3 million was returned to shareholders during the year.
They
also received $3.8 million of the total rebate as an interim payout in February. The rebate is being paid out at $12 a tonne.
Ravensdown said its main focus had been to reduce costs to farmer/shareholders, and chairman Jim Pringle said the extent of the rebate meant that fertiliser was virtually selling at cost.
Chief executive Rodney Green said sales were at a record 1.26 million tonnes for the year.
The 19 per cent increase on last year was sparked by increasing confidence among farmers and the end of drought conditions along the North Island's east coast.
Sales have boomed at the start of the new financial year, with June and July figures about 35 per cent up on last year, in spite of a price rise on June 1.
Christchurch-based Ravensdown is now very much a national business after major North Island expansion in the past four years.
About $14.6 million was spent on capital expenditure last year, but with the expansion phase nearly over, spending is expected to be within the level of depreciation and amortisation from now on.
Raw materials, mainly from overseas, make up 70 per cent of Ravensdown's costs. Although imports are bought in US dollars the plunge in the kiwi dollar has yet to cause problems.
With currency hedging, the group's average exchange rate last year was 53USc to the dollar (compared with 43.5USc yesterday). The exchange rate is unlikely to be an issue until early December and Mr Green said he was not convinced that the dollar would stay down.
In any case, there was a natural currency hedge in that the farmers who own Ravensdown gain heavily from the low dollar through export returns.
The only fertiliser under price pressure at the moment was urea, and that was due more to the international price.
- NZPA
