Friday, March 29, 2024

Ravensdown returns profit to farmers

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Ravensdown returned $68 million to farmers this year after recording a 32% increase in profit before tax, rebate and an earlier issue of bonus shares, its latest annual results show.
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For the year ended May 31, the co-operative’s earnings were $69m, up from $52m in 2019, with the return to farmers made up of a bonus share issue worth $27m, tax benefits of $13m and $28m distributed in the form of a $25 rebate.

Its recently released annual report says the profit increase compared to last year is attributable to almost identical group revenues of $750 million, slightly higher margins and lower costs.

Reasons for lower costs include some planned store improvements being deferred, although they will be undertaken in the future.

The balance sheet showed equity ratios of 77% before the rebate and 74% afterwards, no net debt and an operating cashflow of $143m, which was up from $31m in 2019.

It ended the year with $6m of net cash, compared to $69m net bank debt the year before, the turnaround primarily the result of less inventory and prompt customer payments.

Chair John Henderson is cautiously optimistic about the future.

“But just as farmers are budgeting with caution, we are seeing an uncertain year ahead as recession looms, commodity prices remain volatile, new regulations evolve and a covid resurgence threatens.”

Chief executive Greg Campbell says the company spent $5m on research and development, bringing the total R&D investment in the past five years to $25m.

There was an increase in interest in ClearTech, Ravensdown’s effluent mapping system, while adoption of its HawkEye mapping tool, which helps with nutrient decision making and demonstrating compliance, jumped by 23%. 

Campbell says collaboration with companies such as TracMap and Fonterra have helped with spreading technology and nutrient planning. While precision aerial spreading is still in its infancy, the technology was applied to 152,765 hectares of land, an increase of 40% on the year before. 

In a year where environmental regulations became a reality for many, the co-op’s environmental consultancy was busier than ever, with hours of consultants’ work delivered to farmers up by 29%.

The field-based team delivered 9501 agronomy plans, and Campbell says it is well positioned to help farmers with future government-mandated farm environment plans.

In terms of its own carbon footprint, Ravensdown cut its total emissions by 5.3% and is on track to meet its target of a 15% cut by 2030.

“We’ve been looking at our own use of fossil fuels and evaluating suppliers,” Campbell said.

“Due to our urea supplier’s scale and efficiency, the carbon footprint of offshore manufacturing and transport is still less than domestic manufacture.”

The company invested $28m in physical infrastructure, including stormwater improvements, conveyors, roofing and laboratories, a similar amount to the year before.

Campbell says while some capital projects will be deferred until 2020-21 because of uncertainty over the year ahead, it still plans to complete necessary capital projects to protect operations and services.

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