Ballance increases payouts by 10 per cent

Farmer-owned fertiliser co-op Ballance Agri-Nutrients has boosted dividends and payout by 10 per cent, despite a $10 million dip in its annual operating surplus to $30 million.

The pre-tax surplus fall followed Ballance keeping price rises to a minimum to help farmers with cash flow, lower sales due to lower rural sector spending, increased costs, and good spring conditions last year which reduced demand.

Farmers using less fertiliser for environmental reasons was another possible reason for the sales fall, said chairman David Graham.

The national fertiliser market dropped as much as 15 per cent.

Despite sales volumes dropping 8 per cent, operating revenue was up 3 per cent to $471 million in the year to May.

While holding price rises cut the surplus, it gave Ballance's farmer shareholders more cash in hand during harder times, said Graham.

He was not concerned at the surplus fall and the co-op was in good financial shape, he said.

The co-op will be holding the price of base fertiliser products through to the end of the year.

The combined cash dividend and rebate payout to qualifying shareholders for the year to May is equal to $22 per tonne of fertiliser purchased, or $21.6 million all up.

Directors have also recommended a 30c a share, or 5 per cent, increase in the co-op's share value to $6.30. This is on top of bonus shares issued in December valued at $11.5 million.

The recommended price increase and earlier bonus issue would add $24.67 per tonne to farmers' balance sheets, on top of the $22 per tonne cash payout.

Some $24 million had been reinvested in plant renewal, facilities upgrades and development work during the year.

Ballance and Ravensdown between them have about 90 per cent of the market.