Following a challenging 12-month period, Ravensdown has announced a net profit before tax of $429,000 to 31 May 2023.

A tax benefit takes the co-operative’s 2023 net profit after tax from continuing operations to $2.9 million.

Reported revenue of $977 million includes insurance proceeds for flood damage and a fire at the cooperative’s Napier plant and is on par with last year’s reported revenue of $922 million.

Garry Diack, Ravensdown CEO, observed 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 percent from 1.2 million tonnes last year to 895,000 tonnes 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. 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, Ravensdown has maintained a strong focus on working capital, with tighter inventory management and reduced supply chain volatility resulting in a positive $119 million cash turnaround from the previous financial year. Stock impairment at year end is $4.2 million.

Bruce Wills, Ravensdown Chair, noted Ravensdown’s ongoing focus on balance sheet strength within this high cost and low profitability environment.

“This year’s financial results, which include an improved equity ratio from 62 percent to 74 percent, has highlighted the importance of a conservative approach to managing the co-operative’s balance sheet.

“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.”

Ravensdown continued to invest in technologies and partnerships to bring future scale benefit to customers and shareholders, such as the sustained development of HawkEye, AgriZeroNZ for greenhouse gas reduction technologies, and the new commercial venture arm, Agnition.

The year at a glance 2022-23: numbers for 2021-22 in brackets

• Revenue before rebates to shareholders: $977.5 million ($922.4 million)
• Net profit from continuing operations before tax: $0.4 million ($68.5 million)
• Net profit from continuing operations after tax: $2.9 million ($57.3 million)
• Operating cashflow after rebates to shareholders: $59.2 million (-$60.0 million)
• Equity ratio: 74% (62%).