CBH Group records $134m profit boosted by massive harvest

West Australian grain company CBH Group has posted a huge profit. See the huge numbers.

CBH Group exported 13.4 million tonnes of grain last season, despite some delays loading ships.

West Australian grain company CBH Group has dramatically increased its profit in 2021 to $133.8 million.

Releasing its annual report today, the grain company said its net profit after tax for the 12 months to September 30 this year was off revenue of $4 billion, excluding pool income.

CBH acting chief executive officer Ben Macnamara said grain receivals were 15.1 million tonnes for the season, higher than the 14.2 million tonne average for the past five years.

Mr Macnamara said the $133.8 million surplus was “our strongest performance in five years”.

“Overall, CBH remains in a very strong position with net assets totalling $1.9 billion and no long-term debt,” he said.

“Our net debt position increased to around $240 million but this is directly tied to our inventory.”

Mr Macnamara said the operations division contributed $43.7 million to net profit, while the marketing and trading business accounted for $76.6 million in profits.

He said that was after a combined $17.3 million payout in demurrage costs due to ship loading delays.

Those delays were due to factors including weather-related events, such as a cyclone, floods and bushfires, plus a shortage of train and road transport drivers and derailments.

Mr Macnamara said the marketing and trading division’s performance was a main highlight of the year.

He said it capitalised on strong global demand for WA grain, despite facing ongoing market volatility and local supply chain issues.

“I cannot understate the strong result delivered by Marketing and Trading, who have worked hard to replace the loss of the China barley market last year,” he said.

“The team used their extensive network and long-term customer relationships to open brand-new markets, and access re-emerging markets, delivering great value to Western Australian growers.”

Mr Macnamara indicated the Chinese barley tariffs were ineffectual, with CBH able to sell all its stocks to markets in South America and Saudi Arabia and domestically.

“We had a very low carry (of stocks into the new season),” he said.

“So you can assume that (the Chinese tariffs were futile),”

Mr Macnamara said the CBH’s fertiliser business also experienced a strong performance, with a 47 per cent increase in tonnage sold.

About 184,0000 tonnes were sold to farmers, well up on the 125,000 tonnes in 2020.

He said CBH was working hard to overcome the challenges for the next year’s crop.

“We have got shipments locked away,” he said.

CBH was expecting the current harvest to last another two weeks for most of its receival zones.

Mr Macnamara expected growers to have exceeded last year’s deliveries of 15.1 million tonnes by today.

He said wheat protein levels were lower than previous years but growers were reporting yields well higher than their expectations.