Share price increase

Share-price-increase

Ballance shareholders approve a 60 cent increase in the value of its shares to $8.10.

September 26, 2013

Share price increase

Shareholders yesterday recognised Ballance's consistently strong performance by approving a 60 cent increase in the value of its shares to $8.10.

The increase, ratified at the annual meeting in Hamilton, is the third revaluation in six years, supported by the co-operative’s strong balance sheet and financial performance. Based on an average shareholding of 3,000 shares to cover 100 MT of fertiliser purchases, the increase represents a $1,800 increase in a typical shareholders’ equity in the company.

It caps off a year in which Ballance delivered a record rebate and dividend of $65/tonne and a record trading result of $92.6 million despite the drought drying up fertiliser demand and impacting sales volumes. The rebate averaging $60.83 per tonne and a fully imputed dividend of 10 cents per share, saw the co-operative’s 18,300 shareholders receive a $65 million distribution in August.

Outgoing Chairman, David Graham, said the record performance and rebate, coupled with the higher share value, meant he would go out on a high note.

“In my 15 years as a Director, the last 10 as Chairman, I have seen our co-operative grow and thrive. We have expanded our core fertiliser business to provide the full range of nutrients and advice our shareholders and our customers expect from us.

“We have changed with the times so the level of scientific and environmental advice we provide today more than equals the expectations of shareholders and customers, and we continue to invest in research and development so that we keep ahead of the changing demands on farmers. Above all, we are here for the long haul for our shareholders and customers who rely on us and share in our results through our rebate.”

David Graham retired as Ward B Director and Chairman of Ballance Agri-Nutrients at the meeting, and is succeeded by Ward A Director David Peacocke.

Ballance Chief Executive Larry Bilodeau said the co-operative’s ability to deliver a record result in a tough year came down to a range of factors; smart buying, close attention to costs and efficiency and the return to full production of its Kapuni urea plant.

“A record trading result and rebate is always a good outcome, but more so in a tough year when sales were down,” he said.

Mr Bilodeau said the current financial year had got off to a good start and Ballance had lowered domestic fertiliser prices in June and July, so farmers could make the most of good spring growing conditions.

“From a cost perspective, we are expecting fertiliser prices internationally to stabilise at their current lower levels for the medium term.”

Mr Bilodeau said global influences were at play, with prices for most major nutrients including nitrogen, phosphate and potash all sitting well below price levels compared to the same time last year.

Key drivers behind the pricing were over-supply of some products and lower-than anticipated demand for others.

“World events, be they financial or political, can lead to shifts in demand and pricing for food producers and the businesses that supply and support them. We are seeing a classic example of this at present, with India’s declining domestic currency directly contributing to weak global DAP trade.”

Mr Bilodeau said that in addition, recent instability in the potash market in Russia had created an influx of capacity for potash, although this trend looked like it could now be reversing.

“We are following global fertiliser prices and will adjust domestic prices in line with any changes. It really does depend on where international prices go and we are watching the trends closely.”

In Director elections, Dean Nikora was returned unopposed in Ward B while Oliver Saxton was re-elected for Ward A.

26 September 2013

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