Ravensdown's cash, debt and profit positions have improved
following a strategic review of its business; pictured,
Ravensdown's Ravensbourne works, near Dunedin. Photo by
Ravensdown's refocus on its core business has paid
dividends with a much improved balance sheet and the return of
a rebate to farmers.
Last year, shareholders missed out on a rebate for the first
year in the fertiliser company's history, after a loss-making
operation in Australia caused a profit plunge.
The disappointing result prompted decisive action. A
wide-ranging strategic review was aimed at freeing up
capital, reducing risk, improving operating profit and
lowering debt. The company also exited its operations in
Western Australia and was now solely focused on New Zealand.
In the year ended May this year, Ravensdown recorded trading
profit before rebate and tax of $46 million, up $40 million
on last year. It had record operating cashflows of $185
million and the lowest debt levels for a decade.
Net debt fell $200 million to $49 million, equity ratio went
from 49% to 65% and profit before tax and rebate from
continuing operations increased from $28 million to $73
The co-operative also announced a return to shareholders
worth a total of $37.38 per tonne made up of $15 rebate and a
fully-imputed bonus share issue worth $22.38.
In a statement, Ravensdown chairman John Henderson said the
result placed Ravensdown in a strong position, with a
strengthening balance sheet and profitability.
Cash, debt and profit positions had been ''significantly
improved'' due to the actions taken since 2012-13 as part of
the new strategy.
The company was also transitioning to a more flexible foreign
exchange policy which it anticipated would make a positive
contribution to its current year's performance, Mr Henderson
Chief executive Greg Campbell said increasing farm production
and the subsequent need to replace soil nutrients resulted in
rising fertiliser requirements and growing confidence.
New Zealand tonnages increased 7%, while services that helped
farmers with their nutrient stewardship were also in ''high
demand'', Mr Campbell said.
Rival co-operative Ballance Agri-Nutrients recently reported
a record trading result of $93.5 million for the year ended
May, up from $92.6 million in the previous year.
Revenue was a record $921 million, up from $878 million,
while sales volumes were 1.55 million tonnes, an increase on
A record $78.9 million distribution would be made to
shareholders, which combined a rebate averaging $60.83 per
tonne on fertiliser purchases, and a fully imputed dividend
of 10c per share which added a further $4.17 per tonne to the
Chairman David Peacocke said the results underlined both
rural sector confidence and the financial strength of the
''Demand lifted during the year with forecasts for a high
dairy payout, improving red meat returns, more maize crops
and farmers moving to improve pastures after drought
conditions. We capped off the year with very good autumn
conditions which saw demand reach a peak, driving an upturn
in year-end sales,'' Mr Peacocke said.
The result was achieved in a year where the business lost one
month of urea production during the closure of its Kapuni
plant for maintenance and capital improvements totalling $21