Balance sheet strength and consolidation in a challenging year
- Revenue down to $929 million reflecting lower commodity prices
- Profit before tax $17.2m
- Closing inventory of 281kt, 37% lower than prior year
- Lower working capital and sale of Seales Winslow enabled $69 million reduction in net debt
- Continued reinvestment into co-operative assets with $69 million of capital expenditure.
A focus on maintaining the strength of the co-operative while providing lower market prices for New Zealand farmers and growers saw a year of consolidation for Ballance Agri-Nutrients.
Sales revenue was down to $929 million, reflecting lower commodity prices and decreased sales volumes to 1.16m tonnes from continuing operations. A focus on reduced working capital saw a 37% decrease in year-end inventory, and, with the sale of Seales Winslow, enabled a $69 million reduction in net debt. The year-end profit before tax was down to $17.2 million, however, reflecting decreased margins as lower market prices were passed through to customers.
As a result, the Ballance Board made the necessary decision to not pay a rebate for the 2024 financial year.
“Facing another year of headwinds for the co-operative and its shareholders, Ballance prioritised debt reduction and passing on price and cost savings to customers through the year,” says Ballance Agri-Nutrients Chair, Duncan Coull.
“We moved a number of times to provide affordable nutrients to our shareholders, absorbing commodity price effects internally in order to do so,” explains Coull.
In his first year as Ballance Chief Executive, Kelvin Wickham says key priorities were improving operational efficiency while maintaining a strong focus on health and safety.
“We continued to invest in our assets with $69 million of capital expenditure this year towards plant maintenance and upgrades to improve efficiency. Alongside continued investment in health and safety, this meant there wasn’t a lot left over,” says Wickham.
“We also had a focus on working capital and reduced inventory by 165kt, down 37% from the prior year”.