Dear Charlie,
I find it VERY interesting that:
In spite of facts like:
A) the AWB losing the "single desk" by having the AU Gov. have a veto over the single desk... and haven given export licenses to others...
B) the AWB not having a single desk domestically,
C) International Containers and bag shipments of wheat being deregulated,
D) AWB not having a monopoly on Barley & that market having been deregulated,
E)that a grower-owned and controlled entity unrelated to AWB can apply to manage the single desk;
On top of all the woes around the Oil for Food scandal, deregulation, export license exemptions...
the AWB is able to operate and pull things back together!
So much for a "Single Desk" being needed to make a grower marketing organisation like the CWB/AWB work!
Why should the CWB be treated any different? CWB theory is obviously flawed and out to lunch!
AWB rides high on back of grain prices
October 20, 2007
"AWB shares surged after the wheat marketing group upgraded its earnings guidance for fiscal 2007 on the back of higher prices for grains.
The shares rose 46c, or 20 per cent, to $2.76, after peaking at $2.82.
The group's managing director, Gordon Davis, said the company expected underlying profit before tax and amortisation for the year to be in the range of $80 million-$90 million.
AWB's reported net profit is set to be between $25 million and $30 million.
In February, AWB said it expected an annual pre-tax profit at the bottom end of analyst expectations of $67 million-$116 million.
Mr Davis said yesterday that the better-than-expected trading result was attributable largely to the international commodities trade, which had benefited from favourable commodity trading conditions, particularly in the latter part of the financial year.
An AWB spokesman said the company was benefiting from higher prices and volatility in the market, not just for wheat but for other grains, too. He said there was increased demand for grains.
"World wheat stocks are at their lowest for 30-plus years," he said. "There's still some concern about the Argentine and Australian harvests, and that's on the back of a poor European crop, and that's been driving wheat prices to record highs."
AWB's results for the year ending September 30 will be released on November 21.
Despite the surge in the share price, AWB is still well below its closing price of $6.40 reached on January 12 last year.
AWB shares plunged a few days after an inquiry began last year into the company's role in kickbacks paid to the Saddam Hussein regime in Iraq under the United Nations oil-for-food program. Investors weighed up the chances of AWB losing its monopoly over wheat exports, which it held at that time.
The Cole inquiry, which reported in November last year, found that AWB paid $290 million in kickbacks to Iraq between 1999 and 2003.
In the wake of the inquiry, the Federal Government decided to overhaul AWB's monopoly over wheat exports.
Under transitional wheat-export marketing arrangements for 2007-08, AWB International still manages the national wheat pool.
The Minister for Agriculture holds a veto over bulk wheat exports, and wheat exports in bags and containers are deregulated.
From 2008-09, a grower-owned and controlled entity unrelated to AWB can apply to manage the single desk.
A Fat Prophets analyst, Greg Canavan, said the 20 per cent rise in AWB's share price yesterday was surprising and, based on the trading news, was an overreaction.
Mr Canavan said one could not assume that when a company made increased trading profits that it would be sustainable.
Nonetheless, he said the earnings upgrade had probably attracted investors back to the stock.
"I think a lot of people have probably been looking at it, thinking this is a buy, it looks like the worst is behind it," Mr Canavan said.
"I think this news has just bought a lot of potential buyers off the sidelines."
In the first half, AWB posted a net profit of $11.8 million - down 71 per cent on the previous corresponding period, in the face of severe drought.
Underlying net profit before tax and amortisation in the first half fell 58 per cent to $36.1 million.
Agencies"
http://www.smh.com.au/news/business/awb-rides-high-on-back-of-grain-prices/2007/10/19/1192301043380.html
I find it VERY interesting that:
In spite of facts like:
A) the AWB losing the "single desk" by having the AU Gov. have a veto over the single desk... and haven given export licenses to others...
B) the AWB not having a single desk domestically,
C) International Containers and bag shipments of wheat being deregulated,
D) AWB not having a monopoly on Barley & that market having been deregulated,
E)that a grower-owned and controlled entity unrelated to AWB can apply to manage the single desk;
On top of all the woes around the Oil for Food scandal, deregulation, export license exemptions...
the AWB is able to operate and pull things back together!
So much for a "Single Desk" being needed to make a grower marketing organisation like the CWB/AWB work!
Why should the CWB be treated any different? CWB theory is obviously flawed and out to lunch!
AWB rides high on back of grain prices
October 20, 2007
"AWB shares surged after the wheat marketing group upgraded its earnings guidance for fiscal 2007 on the back of higher prices for grains.
The shares rose 46c, or 20 per cent, to $2.76, after peaking at $2.82.
The group's managing director, Gordon Davis, said the company expected underlying profit before tax and amortisation for the year to be in the range of $80 million-$90 million.
AWB's reported net profit is set to be between $25 million and $30 million.
In February, AWB said it expected an annual pre-tax profit at the bottom end of analyst expectations of $67 million-$116 million.
Mr Davis said yesterday that the better-than-expected trading result was attributable largely to the international commodities trade, which had benefited from favourable commodity trading conditions, particularly in the latter part of the financial year.
An AWB spokesman said the company was benefiting from higher prices and volatility in the market, not just for wheat but for other grains, too. He said there was increased demand for grains.
"World wheat stocks are at their lowest for 30-plus years," he said. "There's still some concern about the Argentine and Australian harvests, and that's on the back of a poor European crop, and that's been driving wheat prices to record highs."
AWB's results for the year ending September 30 will be released on November 21.
Despite the surge in the share price, AWB is still well below its closing price of $6.40 reached on January 12 last year.
AWB shares plunged a few days after an inquiry began last year into the company's role in kickbacks paid to the Saddam Hussein regime in Iraq under the United Nations oil-for-food program. Investors weighed up the chances of AWB losing its monopoly over wheat exports, which it held at that time.
The Cole inquiry, which reported in November last year, found that AWB paid $290 million in kickbacks to Iraq between 1999 and 2003.
In the wake of the inquiry, the Federal Government decided to overhaul AWB's monopoly over wheat exports.
Under transitional wheat-export marketing arrangements for 2007-08, AWB International still manages the national wheat pool.
The Minister for Agriculture holds a veto over bulk wheat exports, and wheat exports in bags and containers are deregulated.
From 2008-09, a grower-owned and controlled entity unrelated to AWB can apply to manage the single desk.
A Fat Prophets analyst, Greg Canavan, said the 20 per cent rise in AWB's share price yesterday was surprising and, based on the trading news, was an overreaction.
Mr Canavan said one could not assume that when a company made increased trading profits that it would be sustainable.
Nonetheless, he said the earnings upgrade had probably attracted investors back to the stock.
"I think a lot of people have probably been looking at it, thinking this is a buy, it looks like the worst is behind it," Mr Canavan said.
"I think this news has just bought a lot of potential buyers off the sidelines."
In the first half, AWB posted a net profit of $11.8 million - down 71 per cent on the previous corresponding period, in the face of severe drought.
Underlying net profit before tax and amortisation in the first half fell 58 per cent to $36.1 million.
Agencies"
http://www.smh.com.au/news/business/awb-rides-high-on-back-of-grain-prices/2007/10/19/1192301043380.html
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