Ravensdown has announced net profit before tax of $429,000 for the 2023 financial year after a challenging 12-month period.
The co-operative’s 2023 net profit after tax from continuing operations was $2.9 million for the year ending May 31, 2023.
It had a reported revenue of $977m, including insurance proceeds for flood damage and a fire at the co-operative’s Napier plant, which is on par with last year’s reported revenue of $922m.
Ravensdown chief executive Garry Diack said the high price environment for product has meant that although customers’ annual spend remained constant, they bought substantially less volume, with tonnage sold contracting by 27%, from 1.2 million tonnes last year to 895,000t this year.
“It is a challenging period for traditional farming practice and Ravensdown’s policy has been to deliver competitive pricing throughout the year, effectively absorbing fertiliser prices in recent times through reduced margin,” Diack said.
“Having distributed value in this way, we finished the year below forecast income and are not in a position to pay a year-end rebate.
“We have also undertaken specific initiatives to reduce operating expenditure through a review of the organisation’s capital expenditure and overhead costs.”
Despite the difficult operating environment, he said, Ravensdown has maintained a strong focus on working capital, with tighter inventory management and reduced supply chain volatility resulting in a positive $119m cash turnaround from the previous financial year. Stock impairment at year end is $4.2m.
Ravensdown chair Bruce Wills noted Ravensdown’s ongoing focus on balance sheet strength in a high cost and low profitability environment.
“This year’s financial results, which include an improved equity ratio from 62% to 74%, have highlighted the importance of a conservative approach to managing the co-operative’s balance sheet,” Wills said.
“While external factors throughout 2023, such as Cyclone Gabrielle and increasing farm input costs, put pressure on cashflow and profitability, equity levels remain robust.
“Within a broader operating environment, we have seen signs that current fertiliser prices will maintain their stability through spring.”
The year at a glance 2022-23: (2021-22 numbers in brackets)
• Revenue before rebates to shareholders: $977.5m ($922.4m)
• Net profit from continuing operations before tax: $0.4m ($68.5m)
• Net profit from continuing operations after tax: $2.9m ($57.3m)
• Operating cashflow after rebates to shareholders: $59.2m (-$60m)
• Equity ratio: 74% (62%).