AWB Limited - 2003 Annual Report

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Year in brief • Launched new grain logistics subsidiary, AWB GrainFlow Pty Ltd, in January 2003. • Opened nine greenfield sites for the 2002/03 harvest and constructed four new sites for the 2003/04 harvest. • Managed about 185,000 tonnes of grain receivals for the 2002/03 harvest. • Developed new Cost and Freight (CFR) markets in Tanzania, Indonesia and Japan. • Physical volumes and financial results for Geneva Global Freight ahead of budget. • Maintenance of market share by Five Star Flour Mill (Egypt), despite near record prices of Australian wheat. • Increased wheat sales to the Japanese Food Agency through the AWB – Zen-noh subsidiary to their highest levels. West Wyalong Grain Centre 20 AWB Grain Centre, The Gums, Queensland
supply chain and other investments Domestic Investments AWB continued to pursue investments in 2002/03 that reduce supply chain costs for growers, strengthen AWB’s regional position and achieve a commercial return to shareholders above the weighted average cost of capital. In January 2003, AWB launched its new grain logistics company, AWB GrainFlow, which as a wholly owned subsidiary will operate AWB’s growing supply chain and logistical services. AWB GrainFlow provides a new, defined and separate identity for business ventures, including AWB Grain Centres (and the coordination of services such as on-farm pick-up), company owned rail stock, the AWB investment in the Melbourne Port Terminal and any future supply chain investments. AWB GrainFlow Grain Centres AWB GrainFlow opened nine, state of the art greenfield sites in SA and NSW in time for the 2002/03 harvest. AWB GrainFlow has also constructed a further four new sites in NSW and QLD, and upgraded the Beanbri site in NSW for the 2003/04 harvest, taking total storage capacity to more than three million tonnes. The drought, particularly in eastern Australia, directly impacted AWB GrainFlow receivals for 2002/03, with total grain receipts of about 185,000 tonnes being down considerably from the previous year. However, AWB improved its market share in the storage and handling sector, and the investments contributed positive gross margins over direct operating costs. With a considerably larger crop in 2003/04, AWB GrainFlow’s Grain Centre business is well positioned to attract significant tonnage, and achieve long term commercial returns for shareholders over their investment life. Rail Freight AWB has committed about $5 million for 51 high capacity rail wagons, to be operated in NSW to improve grain haulage services, and provide a commercial return on investment. Grain volumes hauled by the wagons in 2002/03 were down due to the drought, but AWB anticipates the wagons will play an important part in the grain haulage task for coming seasons. AWB’s Waratah train, which was leased from Freight Australia in 1999, hauled its one millionth tonne of grain during 2002/03. Ports Rental income on AWB’s 50% ownership of the Melbourne Port grain terminal was impacted by reduced grain production and exports. In total, approximately 450,000 tonnes were handled through the facility in 2002/03. AWB continues to investigate further opportunities for port developments. Consistent with AWB's supply chain and investment strategies, these are focussed on improving port services and delivering reduced costs to growers, as well as providing long term commercial returns to shareholders. Offshore Investments AWB’s offshore investments form a key platform in its strategy to diversify its income in a manner that expands end user demand for AWB products and services. The investments have extended AWB’s stake in the grain value chain, in the areas of flour and feed milling, food processing and grain trading, and have established a foothold for AWB in some of the world’s biggest and fastest growing grain markets. In 2003, AWB’s offshore investments performed well in the difficult trading environment caused by drought in Australia. ($m) 30 25 20 15 10 5 0 -5 Commercial strategies to realise efficiency. 2000 2001 2002 2003 NPBT – Supply Chain and Other Investments 21
Page 1 and 2: Annual Report 2003 imagine the futu
Page 3 and 4: During the past year, Australia has
Page 5 and 6: FINANCIAL PERFORMANCE SUMMARY Droug
Page 7 and 8: There are six key business streams
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Page 11 and 12: As a gesture of AWB's appreciation
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Page 15 and 16: For the 2001/02 Pool, AWB managed a
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Page 19 and 20: Through “ring fencing”, AWB was
Page 21: grain acquisition and trading Grain
Page 25 and 26: Children of AWB employees enjoying
Page 27 and 28: grain technology AWB Grain Technolo
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Page 31 and 32: our people and systems People AWB e
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Page 35 and 36: Charles Stott Group General Manager
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24. REMUNERATION OF DIRECTORS Conso
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27. RELATED PARTY DISCLOSURES (cont
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28. SEGMENT INFORMATION (continued)
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31. EMPLOYEE BENEFITS AND SUPERANNU
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32. FINANCIAL INSTRUMENTS (continue
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32. FINANCIAL INSTRUMENTS (continue
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33. DEED OF CROSS GUARANTEE Pursuan
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34. CONTROLLED ENTITIES (continued)
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35. EARNINGS PER SHARE Consolidated
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INDEPENDENT AUDIT REPORT TO MEMBERS
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FINANCIAL CALENDAR - 2004 Annual Ge
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AWB GROUP LOCATIONS ROYCE DESIGN AW
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AWB Limited - 2003 Annual Report

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