2008 crop to be severely impacted by drought, Namoi Cotton

24 Oct '07

3 min read

Namoi Cotton recorded a net profit after tax and rebate of $12.9 million for the half-year ended 31 August 2007 compared to the previous half-year's result of $24.0 million.

The directors believe this is a sound result, achieved despite a considerable reduction in Australian cotton production and operational challenges associated with pressured trading margins and a historically high Australian dollar.

Namoi Cotton's ginning and marketing segments operate on a seasonal basis with profits from operating activities recorded in the first half of the year and losses incurred in the second half of the year associated with the fixed costs of those segments.

The directors have opted not to pay an interim distribution (2006: 3.5 cents) and will consider a final distribution once the full-year result is finalised and objective quantification of 2008 crop production is confirmed.

Namoi Cotton ginned 397,000 bales of the 2007 crop (2006 season: 625,000 bales) representing market share of 30.2% (2006 season: 23.8%).

Effective off season maintenance programs, improved reliability and reshaped work systems facilitated a 7% improvement in ginning efficiency.

Namoi Cotton has implemented a capital management program for its ginning network whilst delivering industry benchmark services to growers.

Marketing volumes for the 2007 crop are currently 446,000 bales (2006 season: 703,000 bales) representing market share of 33.9% of the Australian crop (2006 season: 26.7%).

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