Australia's AWB Year Profit Down 53% on Drought

AWB, Australia's embattled main wheat exporter, reported a 53 percent fall in full-year net profit on Wednesday, hit by a severe drought, but said the outlook for agribusiness in Australian was positive.

The company's shares rose nearly 6 percent in early Wednesday following the result, peaking at A$2.84.

AWB said net profit fell to A$27.1 million (US$24 million) after one-off costs of A$30.9 million, including A$15.4 million for redundancies and restructuring, from A$58.1 million in the previous year. The result was in line with the company's forecast.

"The result was affected by a full year of drought," said managing director Gordon Davis. "But the outlook for Australian agribusiness is very positive."

AWB lost its role as Australia's exclusive wheat exporter after a government inquiry found it had paid kickbacks to the former Iraqi government of Saddam Hussein to secure sales. The company faces several lawsuits over the scandal.

Davis told reporters the group was positioning itself for future growth without the export monopoly, looking to expand in financial services and commodities trading at home and abroad and to grow its rural services business in Australia.

He said the growth of the biofuels industry, a global shortage of agricultural commodities and record commodity prices made for an upbeat outlook for agribusiness in Australia.

"We're moving into a phase of growth and improving the quality of earnings," he said.

In recent years the group has opened trading offices in Geneva, India, Brazil and Singapore and all were operating well, Davis said.