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AWB, the Australian wheat exporter that paid kickbacks to Iraq, will review dividends after it slashed payouts following a 71 per cent slump in first-half profit. Its shares fell as much as 8.4 per cent.
Net income fell to A$11.8 million ($13.3 million), or 3.4 cents a share, in the six months ended March 31, from A$41.4 million, or 12 cents a share, a year earlier as drought slashed sales, it said yesterday.
AWB cut its first-half dividend by 75 per cent after the wheat crop in Australia, the third-largest exporter, fell to a 12-year low. The Government said on Tuesday a new body must be established by March to replace AWB as export manager after an inquiry into the Iraq kickbacks.
"AWB attracted great retail interest because it had the stable dividend policy, it was always on an attractive dividend," said Belinda Moore, Brisbane-based analyst with ABN Amro Holding NV. "Today there's uncertainty around that dividend."
The company will pay an interim dividend of 4 cents a share compared with 16 cents a year earlier.
The shares have fallen 22 per cent in the past year on the drought and uncertainty over wheat exports.
The result compares with the A$13.4 million average estimate of three analysts surveyed by Bloomberg. AWB repeated an earlier statement that full-year profit may fall as much as 40 per cent from last year.
A United Nations investigation into the Oil-for-Food programme found AWB paid US$222 million ($305.7 million) in illegal payments to Hussein's former regime in Iraq to win wheat sales.
-BLOOMBERG
