Ballance Agri-Nutrients keeps farmer rebate at $45/tonne after earnings rise 25%

Total annual sales – including nutrient products, animal feeds and industrial ingredients – were up 1.5 percent to 1.64 million tonnes.Photo: Lynn Grieveson

Ballance Agri-Nutrients will pay an unchanged farmer rebate of $45 per tonne after the fertiliser company's annual gross trading result - a measure of profit including operating costs - lifted 25 percent.

The Mount Maunganui-based cooperative said the gross trading result was $71.3 million in the year to May 31 and the rebate, to be paid on July 27, will average about $4,500 for an average shareholder. The return to shareholders of more than $56 million represents 81 percent of pre-tax profit, it said. Retained funds will be used to bolster the balance sheet for future re-investment.

Total annual sales – including nutrient products, animal feeds and industrial ingredients – were up 1.5 percent to 1.64 million tonnes. The higher volume, together with a continuation of the growing demand for premium nutrient products that offer improved environmental performance, was reflected in a 2.6 percent increase in revenue to $826 million.

Chair David Peacocke said while the result reflects positive sentiment among farmers and growers "we are very aware of the increasing competition in the New Zealand fertiliser market, and the need to increase our agility."

Ballance is already gearing up for the future with investment in supply chain and manufacturing efficiencies, he said. Projects completed during the 2018 financial year – such as a new consignment store in Waimate, and new expanded Ashburton service centre – aimed to improve service levels, load-out times and product availability through Ballance’s national distribution network.

“Our infrastructure investment is all linked to our focus on a smarter supply chain that will deliver higher service levels and greater choice and ease for our farmers," he said.

Chief executive Mark Wynne said another priority is accelerating digital services. The MyBallance platform launched as a free offering to Ballance shareholders in the second half of the financial year already has more than a quarter of all active shareholders registered, allowing them to see and manage their nutrient planning, ordering and records online, he said.