Ballance FY18 result up 25% to $71m

26 July 2018 – New Zealand’s leading farm nutrient supplier, Ballance Agri-Nutrients, today announced a 25% lift in the Co-operative’s gross trading result to $71.3 million – reflecting current strength across much of the rural sector.

Ballance Chairman, David Peacocke, says the positive financial performance in the year-ended 31 May 2018 allowed for a farmer rebate of $45 per tonne – along with bolstering the balance sheet for future re-investment for the benefits of farmers.

The rebate, to be paid on 27 July, will average about $4,500 for an average shareholder, with individual payments of more than $100,000 to the largest farming interests. The return to shareholders of more than $56 million, represents 81% of pre-tax profit.

Total sales for the year – including nutrient products, animal feeds and industrial ingredients – were up nearly 1.5% 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% increase in revenue to $826 million.

Mr Peacocke says the Co-operative enjoyed another very strong year – reflecting the positive sentiment among farmers and growers – “but we are very aware of the increasing competition in the New Zealand fertiliser market, and the need to increase our agility.”

He says Ballance is already gearing up for the future with investment in supply chain and manufacturing efficiencies “for the benefit of shareholders, customers and the local communities supplying the goods, labour and services for the projects throughout the country”.

Projects completed during FY2018 – such as a new Consignment Store in Waimate, and new expanded Ashburton Service Centre – were focused on improving service levels, load-out times and product availability through Ballance’s national distribution network. In another industry-first, Ballance has successfully piloted new self-service silos that offer greater convenience for customers.

“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.”

Chief Executive, Mark Wynne, says another priority is accelerating digital services for customers to support the future competitiveness of New Zealand farming.

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, so that they can see and manage their nutrient planning, ordering and records online.

“This is about being a forward-focused business – giving our farmers flexibility and using our digital capability to knit everything together seamlessly from specialist advice to sustainable and accurate placement of nutrients on-farm.”

Mr Wynne says the success of MyBallance with farmers is in turning raw data into useful information that means Ballance customers can really have their “farms at their fingertips”. MyBallance also received global recognition during the year winning the Best Run Award at the prestigious international SAP Innovation Awards 2018.

Specialist new tools like MITAGATOR® – developed in partnership with Government through the Primary Growth Partnership – harness the best New Zealand science so that farmers know where to invest for the biggest environmental gains, while the MyBallance platform means customers can order online 24/7.

Mr Wynne says demand will continue to lift for smarter products and services, such as Ballance’s SPREADSMART® which supports precise aerial applications of fertiliser and pilot safety. Applications using this technology were up three-fold compared with FY2017. This growing demand is being met with more capacity delivered through new Air Tractors that offer improved productivity and are part of the Co-operative’s aircraft refurbishment programme.

The Mid-Canterbury community also recently welcomed the confirmation of a $5 million rebuild of the SealesWinslow plant in Ashburton after a major fire in December.

“This will deliver efficiencies – with robotic packing and bagging – and safety improvements, along with greater capacity to produce premium New Zealand-made animal feed to meet demand for locally-made high-performing compound feeds,” he says.

ENDS

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