THE largest ever annual surplus was announced by CBH Group in its Annual Report this morning, driven by a record harvest, strong shipping demand and dramatic shifts in market fundamentals as a result of the Ukraine conflict.
For the financial year ending on September 30, the grower-owned co-operative reported a surplus (or net profit after tax) of $497.7 million, dominated by the $437.9m surplus posted by the Marketing and Trading (M&T) division.
Over the year, M&T accumulated 50 per cent of the record WA crop and paid a record $5 billion to WA growers.
"The Marketing and Trading division experienced a significant increase in export margins due to the Ukraine conflict, which started after the division had largely completed its accumulation program," said chief executive officer Ben Macnamara..
"Market fundamentals shifted dramatically after the start of the conflict, and this significantly increased the international value of grain far beyond anyone's expectations."
MORE STORIES:
M&T plans to retain 62pc of its surplus to bolster the division's equity position, which will be necessary to fund the purchase of the current and forecast larger crops, manage market risk and offer higher prices for growers.
The remaining 38pc, or $168m, will be reinvested in the network in line with CBH's strategy to be able to export three million tonnes per month by 2033, or sooner.
"We currently have a once-in-a-lifetime opportunity to strengthen and reinvest in the co-operative - it is that type of forward-looking vision that allowed the co-operative to deliver major projects such as the Kwinana Grain Terminal in the 1970s, which are still delivering value growers today," Mr Macnamara said.
"Strengthening the network is a long-term investment - an opportunity to set us up for success in the coming years as the crop size continues to grow.
"While we have invested significantly in the network over the past five years, we are committed to investing a further $4b over the next decade, which is crucial to increase the capacity of the network and deliver sustainable, long-term value for Western Australian growers."
Meanwhile, Operations recorded a surplus of $57.9m driven by record receivals of 21.3mt last harvest, as well as strong shipping demand.
The 2021/22 harvest smashed dozens of records, including outstripping the five-year crop average by 50pc and growers delivering their grain to CBH sites quicker than ever.
For more information on CBH's Annual Report, see next week's edition of Farm Weekly.
