AWB said "accounting errors" in Brazil would result in the company cutting the 2007-08 profit by AUS$4 million to AUS$60.6 million. The accounting errors were discovered during a comprehensive review of the Brazil operations.
"It is likely that we will emerge with a smaller and refocused business," said managing director Gordon Davis. The financial comparatives for the year ending September 30 will also have to be restated.
As well, AWB Brazil’s poor performance will lower expected first-half profit to a range of AUS$8-9 million. The first-half result had already been lowered to AUS$10-12 million in February – a drop of 45-55% below the previous corresponding half year of AUS$22.3 million. This downgrade led to a huge selling of AWB stock, which reached a low of AUS$1.52.
AWB Brazil, set up three years ago, employs 80-100 people. It trades in soybeans, corn oil and meal, and is involved in cattle feed-lots. It has niche interests in sugar and meat trades. Despite Brazil, AWB said that overall the group’s international commodity management operation had recorded a first-half result in line with the previous year.
US$100 = US$77 = €56