Duxton Water announced record half-year profit of $8.3 million

Corporate water holder Duxton Water Limited has announced its highest ever half-year net profit, as the federal government continues its water recovery efforts.

Corporate water holder Duxton Water Limited (D2O) has announced its highest ever half-year net profit, as the federal government continues its water recovery efforts.

The ASX-listed company announced a half-year net profit of $8.3 million as part of its mid-year presentation to investors.

Duxton’s water portfolio, made up of 19 different entitlement types and zones, was valued at $354 million, down from $401 million this time last year.

The decrease was primarily driven by the sale of $25.2 million of water entitlements to Treasury Wine Estates, which exercised its call option to buy back 2799 megalitres from Duxton.

In July last year, TWE sold 4770 megalitres of water entitlements to Duxton for $39.1 million, but retained the call option.

It comes as The Weekly Times recently reported the federal government had paid more than twice the going market price for water entitlements in its bid to recover 450GL of water by the end of 2027.

There is speculation large corporate water holders, such as Duxton, Argyle Capital and the AWARE Water Group, may look to sell.

However, water brokers have said irrigators are holding back, knowing prices are likely to surge over the next three years.

Duxton Water Limited chair Ed Peter. Picture: Matt Turner

Duxton currently manages a water portfolio of 87.3GL, down from 90.5GL six months ago, with 61 per cent of its permanent water portfolio under lease as of June 30, which “helped mitigate exposure to the fluctuations in allocation prices observed in recent months”, according to Duxton chair Ed Peter.

“Significant rainfall during late spring and early summer across key irrigation areas led to a sharp decline in allocation prices at the beginning of 2024. While this impacted the yield of unleased high security entitlements, most of the portfolio was secured into leases and forward contracts, which helped to stabilise revenue streams,” he said.

D2O paid out its 14th consecutive and increasing dividend paid since November 2017 at 3.6 cents per share.

Duxton Water ranked 18th in The Weekly Times top 50 agribusinesses in July this year, with a market cap of $216.68 million.