Ravensdown flips $5.4m loss into $30m profit as sheep and beef farmers buy more fertiliser

Major fertiliser co-operative Ravensdown has turned around a $5.4 million loss into an after-tax profit of $30m as farmers enjoy higher prices despite the Iranian conflict. The Christchurch-headquartered company is crediting the result for the financial year to May, which includes a rebate, in part to a solid lift in fertiliser demand and buying supplies at good prices. Ravendown’s profit before tax and rebate of $50.1m, compared with last year’s $2m deficit, is on revenue of just over $917m, up 20% on the previous year. Better agricultural returns for sheep and beef farmers as well as a good dairy payout have supported a recovery in fertiliser sales after several years of subdued demand. Overall sales volumes were up 8%, more than one million tonnes being sold, compared with 962,000 tonnes the previous year. [Missing Credit]Fertiliser co-operative Ravensdown chief executive Garry Diack. Photo: Supplied Chief executive Garry Diack said the financial result showed the value of the co-op delivering in an increasingly uncertain global environment. “International fertiliser markets remain heavily influenced by geopolitical events. Conflict in the Middle East, the ongoing war in Ukraine and broader supply chain disruptions continue to create volatility in both product availability and pricing.” Ravensdown’s long-standing relationships with global suppliers and a joint venture shipping partnership proved their worth to the business over the past year, he said. He said the supplier connections built over decades had provided access to product through different market cycles. They had combined with domestic superphosphate manufacturing and an inventory management system to provide customers with certainty in an “increasingly uncertain’’ world. Chairman Bruce Wills said the board had weighed up global supply volatility to provide a rebate for shareholders of $15 per tonne. He said this would return value to co-op-owning farmers and growers, who had supported the business throughout a volatile supply period in a high-demand year. “Our focus throughout the year has been to provide secure access to our products at competitive prices, and we’re pleased to be returning additional value to our shareholders through this year’s rebate”. Fully paid shareholders would receive the rebate as a cash payment, and partly paid shareholders in shares to help them build their ownership in the co-op, he said. Mr Diack said targeted projects had helped drive the performance, including major investment in manufacturing, better freight results and improved data and automation supported by AI. “By improving our operations, we’ve strengthened our financial performance while continuing to invest in the products, services and expertise our shareholders rely on.” The balance sheet was down only slightly at a near 80% equity ratio. Over the past year investment in initiatives had continued for farmers and growers to improve productivity, while reducing environmental impacts. HawkEye technology provided more detailed nutrient insights, assisted by AI to include recommendations and fertiliser plans for each farm. The precision mapping software would extend to crops, including forage, before the end of this year. EcoPond, an innovation cutting methane emissions from dairy farm effluent ponds, was operating on more than 200 farms. Mr Diack said Ravensdown was well positioned to cope with further global uncertainty. Farming businesses were facing changing market conditions and the focus would be on continuing to secure reliable supplies at competitive prices, providing expert advice and delivering value, he said. He said strong financial discipline would remain a priority as supply chain challenges continued over the coming year. Ravensdown’s financial results: · Total revenue before rebate: $917.2m ($763.9m last financial year) · Net profit before tax and rebate: $50.1m (-$2m) · Net profit after tax and rebate: $30m (-$5.4m) · Operating cash flow: $38.1m ($103.2m) · Equity ratio: 79.1% (80.3%) · Rebate: $15 per tonne

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