Investors Speak: Not Yet Done And Dusted At AWB

AMID a drubbing from disgruntled shareholders, AWB is facing a savaging of its profit from the drought but has the enticing prospect of a record crop this year if the drought breaks.

The agribusiness companys immediate strategy also depends on what wheat marketing arrangements the Federal Government puts in place.

AWB managing director Gordon Davis said net profit in 2006-07 would be 30-40 per cent below last years $58.1 million.

Forecasts for underlying profit before tax were at the bottom end of analyst expectations, between $67 million and $116 million.

"Our earnings forecasts are highly conditional on the length of the drought and any changes to wheat export marketing arrangements," he said.

However, chairman Brendan Stewart said one forecaster had predicted a record crop of 26-27 million tonnes of wheat next summer if the drought broke in autumn.

Mr Stewart told yesterdays annual meeting in Melbourne that, in the short term, the plan to split AWB would not go ahead until the Federal Governments wheat marketing policy was finalised.

"We will not spend grower and shareholder money on a detailed demerger proposal until we have clarity about the Governments future plans for wheat marketing," he said.

Any federal changes to the single desk are likely to be in place by June 30. Some time after that, AWB will hold an extraordinary general meeting for shareholders to vote on the demerger.

The demerger would involve splitting off AWB International into an independent grower-owned company to manage the national pool. AWB would remain a listed agribusiness company with competitive pool services.

Directors faced a storm of criticism from the floor but shareholders passed a management and board remuneration package despite calls for lower pay for executives.

James Rackham from the South Australian Farmers Federation said board members had demonstrated a culture of "superiority and arrogance" during the Cole oil-for-food inquiry, and called for the removal of the directors.

Shareholder activist Stephen Mayne agreed. "Im staggered you have the front to turn up," he said.

Grower Richard Bootle from NSW was also forthright. "I want you gone today. It could be the greatest gift you can give the shareholders of AWB," he said.

Mr Stewart emphasised that no executives had been charged and should be treated fairly.

The total remuneration package for executives would be lower than last years, and AWBs policy was to pay executives 50-75 per cent of the accepted rate among listed companies, he said.

Mr Stewart said five board members had been re-elected by shareholders in the past 12 months. He said he had already indicated he would stand down as soon as the companys restructure was finalised.

AWB shares fell 4¢ to $3.23.

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