Corporate: Namoi Cotton is being crippled by the drought; but it’s still soldiering on
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The unprecedented drought is crippling the agriculture sector and Namoi Cotton (ASX:NAM) has not escaped.
The company reported in its half yearly results for the six months ended 31 August 2019 that cotton season ginning volumes had fallen over 60 per cent, nearly halving its revenue.
However, its underlying result was not as severe as it could have been thanks to price increases and cost reductions.
The company reported an after tax loss of $4 million compared with a $14.3 million profit in H1 FY2019.
On a normalised basis, Namoi posted an after-tax profit of $1.7 million thanks to post-tax impairment charges to the value of ginning assets and one of its investments though this was still down 88 per cent from the previous corresponding period.
The company did not try and hide the state of the market but asserted it was scaling to the conditions.
Chairman Tim Watson said,” Shareholders can be assured Namoi is using this period to streamline and strengthen its business”.
CEO Michael Renehan argued the company’s seed business was well placed to supply the feedlot and livestock markets at improved margins.
Estimates for the 2020 Australian cotton crop range are between 600,000 to 1.1 million bales. Naomi anticipates its own volume to be between 125,000 and 175,000.
Shares were unchanged this morning but have stagnated since April.
Eden Innovations (ASX:EDE) has sold $403,000 of its concrete-strengthening additive in the September quarter. Although this was exactly the same amount as the last quarter due to a delayed start to one of its projects, its fuel system Optiblend was 312 per cent higher than last years’ September quarter.
This meant that its total sales were $669,000 – 43 per cent higher than the prior corresponding period. While shares were unchanged this morning it has nearly doubled since June as a result of its success in the US market.
Range Resources (ASX:RRS) is delisting from the ASX on November 25. The company is currently suspended but will remain listed in London on the AIM. The company listed low liquidity and administration costs as the reasons behind its move.