The fertiliser group is getting excellent results from the system but chairman John Henderson said the issue is to get all the planes fitted to meet the unbelievable demand.
Only four planes have the technology.
In the latest year the more precise fertility scanning and application resulted in 18% of farmland belonging to IntelliSpread customers being avoided because it is environmentally sensitive or unproductive.
Those results had great cost and environmental savings for farmers and the group wants to get the gains across the country, Henderson said.
“We’re not building up the plane numbers as we’d like but there’s Civil Aviation Authority regulations to work through as well. We want to do them all.”
Higher world fertiliser prices increased costs for Ravensdown, reducing earnings and leading to a lower rebate.
The group’s fertiliser prices were held at a level that squeezed margins, chief executive Greg Campbell said.
The profit before tax and rebate for the year ended May 31 was $52 million, down from $63m a year earlier. After the rebate, tax and impact of discontinued operations, the profit was $12m, up from $7m.
Ravensdown is paying $35m back to shareholders through a $30 a tonne rebate on fertiliser sales. That is down from $47 a tonne last year. Half the rebate was paid in June with the balance paid this month.
The co-operative will retain $12m of net earnings to invest in infrastructure, research and development, product innovation and new technology, Henderson said.
“After five years of consistently profitable results our shareholders tell us that the rebate in any one year is not the be all and end all.”
A sustainable co-operative with competitive prices across 12 months is more important for the long term.
“We could have charged an extra $5 to $10 a tonne, depending on the product, and it’s a good chunk of money but it is the shareholders’ money.”
It is a subject the co-operative will be thinking about for the future as well as the impact on the group equity ratio, which was 70% after the rebate payment from 71% a year earlier.
Fertiliser tonnages were virtually static year-on-year but sales of the coated urea product N-Protect increased by 75%. It helps reduce the amount of nitrogen lost to the atmosphere and though it is more expensive the overall gain to farmers is 10% to 15%. “They’re starting to realise the value for their farms is worth it,” Henderson said.
The higher-value product will replace standard nitrogen fertiliser over time and if the market doesn’t do it then regulation will.
He also reported increasing sales of the ClearTech dairy effluent product after a number of award wins this year.
Total group revenues of $750m were up from $678m a year earlier.
As well as pricing strategy cutting into profits Ravensdown has also built up its inventory to $159m at balance date from $134m a year earlier as a protection against supply risk from global geopolitical issues.
A foreign exchange loss of about $1m and setting aside $1.3m for a Holiday Act remediation also figured.
During the year Ravensdown spent $27m on infrastructure, $6m on new technology and $5m on research and development.
Operating cashflow fell to $32m from $98m previously. Part of that was because May is a big sales month showing up in receivables in the year-end balance sheet, Henderson said.
