A bigger national cotton crop last year has revved up cash flow earnings from ginning activities and cottonseed and lint sales to deliver a big boost in Namoi Cotton’s consolidated net profit to $6.8 million.
The current season crop, now being picked, is tipped to generate even more cash flow.
Namoi’s 2017-18 ginning throughput is expected to rise as much as 18 per cent on last autumn’s 1.01m bales, thanks to an expected 23pc increase in the size of the total cotton harvest to about 4.6m bales.
Last season’s total Australian crop was also up, by 38pc, on the 2.7m bale harvest in 2016-17.
Namoi, which shed its co-operative status last year to become fully listed on the Australian Securities Exchange, increased its profit for the year to February 28 by about $6.5m – up from just $300,000 in 2016-17 trading period.
Chief executive officer, Jeremy Callachor, said Namoi had notched up a strong financial performance on the back of the significantly bigger harvest across NSW and Queensland.
The company’s full-year profit result coincides with a resignation announcement by long-standing independent director and influential rural accountant, Michael Boyce, who joined Namoi’s board in 2002.
I feel the time is right to step down and for a change of stewardship to take the business into the future as a fully listed public company
“After almost 16 years of involvement, and with the restructure completed and representing a new era for Namoi Cotton, I feel the time is right to step down and for a change of stewardship to take the business into the future as a fully listed public company,” Mr Boyce said.
Chairman, Stuart Boydell, said the board was working through a director recruitment process as part of its succession planning following the restructure.
He said Mr Boyce had been a strong and effective contributor to Namoi and provided invaluable stewardship through the transition from a co-operative.
His counsel and guidance was greatly appreciated by his fellow directors.
Mr Boydell said the past trading year’s strong operational performance and financial results had ensured the company could pay a final 1.9 cents a share dividend, equivalent to 40pc of net profit after tax.
Group earnings before before interest, tax and depreciation, restructure costs and business combination gains were up from $11.1m in 2016-17 to $23m.
Mr Callachor said ginning volumes last season increased 43pc, while cottonseed trading business had shipped and handled 266,000 tonnes, up from 172,000 the previous year.
Joint venture business with Louis Dreyfus Commodities, Namoi Cotton Alliance, had increased cotton lint sales from 507,000 bales to 636,000, but its containerised grain commodity packing venture lost ground, largely because of a reduced chickpea crop.
Commodity packing volumes dropped from 226,000t to 168,000t and the business was not anticipating the current year to deliver any notable increase.
However NCA expected to market between 700,000 bales and 800,000 bales of cotton from the current crop, or as much as 26pc more than it traded last season.