Fernz has 35% lift

Press, 28 July 1989, Page 14

Fernz has 35% lift

Fernz Corporation, the Auckland-based fertiliser and chemicals manufacturer, reports a 35 per cent increase in its operating profit in the 12 months ended May 31. The company exceeded the forecast for its agricultural chemical — animal health business by 19% and fertiliser by 20%, but was short of budget in industrial chemicals by 15%. The 40% interest held by Fernz in BOP Fertiliser, which had a good result, formed the major portion of the group’s equity income. As a co-operative, BOP previously enjoyed tax advantages which ceased on April 1, 1988. It is now a full taxpayer. Delays in the commissioning of the $25 million West Australian chlor-alkali plant, and the titanium-dioxide plant it services, resulted in this facility operating at forecast levels for only three months of the 1989 financial year. The plant is now operating at full load and operating well. The trading environment in

Australia remained strong and the climatic conditions throughout the year were excellent for the rural sector. In New Zealand, the climatic conditions were adverse during the first half, but in the second half performance in both fertilisers and agricultural chemicals reflected the improved outlook for the rural economy, particularly in the dairy sector. The company reports that prospects for the 1990 finan-

cial year continued to look good and profits will be enhanced by a full year of operation of the chlor-alkali plant and increased involvement in the timber preservation industry. The directors have recommended payment to shareholders of a final cash dividend on ordinary capital of 14c a share — making a total of 22c a share for the current year (last year, 20c a share).

FERNZ Result year ended May 31 1989 ($000) 1987 ($000) Turnover 274,389 211,240 Profit before tax Tax provided 25,291 8,411 16,642 5,960 Profit after tax • Minority interest 16,880 163 10,682 (10) Equity income 16,717 1,471 10,692 2,785 Profit before extraordinary items . . . Extraordinary items 18,188 198 13,477 1,259 Net Group profit after extraordinaries 18,386 14,736