August 21, 2025 • 6 mins
The chief executive of Ballance with the fertiliser co-ops’ annual results. Plus Ballance Agri-Nutrients has been forced to take an $88 million hit on the value of its Taranaki manufacturing facility, given the uncertainty surrounding its future gas supply.
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Speaker 1 (00:00):
Calvin Wickham, chief executive of Balance. I'll start with you.
They are going to hand out, when I say handout,
payback whatever one. We want to call it a tax
free capital return of two dollars per share. Now, I
saw your eyes light up at the prospect of all
those dairy farmers with all that money and a ten
(00:20):
dollar payout, and they're really wanting to cook with gas.
I shouldn't mention gas to you, should I But it's
going to be good for the rural economy.
Speaker 2 (00:29):
Yeah, good afternoon, Jamie. Absolutely, I think we're riding a
real wave of confidence now as it is. I'm really
pleasing to see how Springs started off. And I suppose,
subject to the shareholder vote, if they never two dollars
of goes out, the a casual mink stillars for those
Fonterra farmers and the rest of the sect. Beautiful to see.
Speaker 1 (00:47):
Well, I think it'll be a done deal. It's been
well signaled and Fonterra farmers have had about a year
to digest this one. As I said Myles Hurrell, coming
a wee bit later, you've come out with your annual
results this morning, and I guess that the eye catching
number was the eighty eight million dollar right down you've
had on your Copoony gas to your rea plant due
(01:08):
to the uncertain availability and affordability of a New Zealand
natural gas.
Speaker 2 (01:13):
Yes, and that is the frustrating, this important part, because
behind that number was a really good year. We had
a really good season, beautiful autumn. Underlying cash flow was strong,
we paid down debt, good good earnings before tax. But
then at the end of the year we had to
consider the Copoony asset. I think it's been well telegraphed
in New Zealand, the gas issues that we're facing all
of us, number of industries, not alone, and sitting there
(01:37):
looking at the future value of the asset. If you
haven't got gas, you can't get an income from it.
So the accounting the standards was to write that asset down.
Speaker 1 (01:45):
The Capoony Aurea plant was, or it used to be
in the good old days, a duel in the balanced
crown certainly is now a liability.
Speaker 2 (01:53):
That's not a liability. But I think if you look
back over the history, when you make money at Caperny
and you can manufacture locally for lower than the international price,
so it's had good years and it's had weaker years
as well. It's disappointing not to have that resilience of
nitgien production in New Zealand if we had to close,
But we're not looking to close at the moment. We're
just ridden the asset value down to zero and we're
(02:15):
still going.
Speaker 1 (02:16):
Asketball plant for a few months.
Speaker 2 (02:18):
We're trying not to. We're still in discussion for a
three month short term gas contract and then we might
have to look for a four month shut down.
Speaker 1 (02:26):
So effectively we could end up importing all of our area, could.
Speaker 2 (02:30):
End up putting all of our nitrogen yip that supports
our agriculture business. That's a potential outlook here.
Speaker 1 (02:35):
And I know that Greenpeace don't like nitrogen, don't like
it one, but the New Zealand primary sector, the pastoral
part of it anyhow, is so dependent on nitrogen fertilizer.
And I remember hearing a fact that nitrogen fertilizer effectively
feed something like half of the world's population.
Speaker 2 (02:53):
I think ye, we mentioned it is critical to feed
the world. Look, we can import, but it would be
good to have some resilience here. So we are work
can still on plans for future nights in production in
New Zealand. We had been thinking of post gas and
when I started in the role in lesson two years ago,
I was told, no problem, gas wall, we head of
twenty thirty five, twenty forty. We're here, we own twenty
twenty five. Facing initiae, that's really just rapidly come towards
(03:15):
us as a country. But we are thinking of what
we can do post gas. How do you produce nights
in New Zealand In the meantime we'll cover with imports,
not just so U rare. Of course there's all the
other forms of night gen, DAP and other products these
days as well.
Speaker 1 (03:28):
Maybe the White Knight to come and to save you
was going to be into Pocky tonight. Shane Jones Drill
Baby Drill.
Speaker 2 (03:34):
Will be supportive of initiatives to have more gas. We
think it's the transition fuel and for Shane at least
he's standing out there and looking to try and make
a difference.
Speaker 1 (03:43):
Hey, the what one thing? And I used to be
a shareholder of Balance or it's what its predecessors were.
I think it was the Southland co Operate to Fertilizer
Company or something back in the eighties when I was
a young farmer. We always used to look forward to
our rebate on our shares. No rebate this year.
Speaker 2 (04:02):
No rebat this year. I mean, at the end the
board looked, had a hard look at it. The underlying
operating performance was good. But when you take an eighty
eight million dollar impairment on your gasesset, putting thing was
doue to hold the funds and the balance sheet for
the uncertainty head and keep the strong balance sheet.
Speaker 1 (04:17):
Nominal share value for balanced shares is nine dollars. And
we've got another big agricultural or big primary sector company,
the Alliance Group, which is going through the process of
well getting in some recapitalization basically, but for shares bought
in the nineteen eighties or the nineteen seventies for a dollar,
they might be worth a dollar twenty six if you're lucky.
(04:39):
So I guess you're getting some capital growth with your
balance shares.
Speaker 2 (04:43):
At least we had done. I mean, the share value
went up a couple of seasons ago from eight ten
to nine dollars, and even with the impairments of that,
it's unimpacted. You know that the balance sheet is strong,
equity position is good. We paid that debt so there's
no change to that shaar price and we've still got
an overage in terms of the net asset value backing
on those years.
Speaker 1 (05:00):
How good is this season going to be for pastoral farmers?
Speaker 2 (05:03):
Oh, we think it's going to be great. We're really
looking forward to it. Spring's already firing up. We've already
seen parts of the sectors like some catch up if
you like in sheep and beef. Are your top dressings
after a good start? Daeries looking good? So we're confident.
I think I'm sort of I wouldn't be surprised if
we're ten percent up in spring versus last year.
Speaker 1 (05:20):
Hey, when do you move out of your Mount MONGANII premises.
Speaker 2 (05:22):
We're going to stay there in terms of the national
support office, but the factory will close around November and
we'll move to a distribution hub from there. So what
are you doing with the land while we still need
it for the storage and distribution for the next period?
For sure?
Speaker 1 (05:35):
Sure you're sitting on a gold mine there.
Speaker 2 (05:38):
Well, we still need it for storage and distribution. It's
close to the port, bring the product, the costs from
the port and distribute it out to the heartland and
the Waycatto up north, so I think we'll be there
for a while yet.
Speaker 1 (05:48):
Okay, Calvin, welcome. Thank you very much for taking time
out of your busy day to come in and see
us alive in the Taronga studio. It's good to catch
up again because you and I haven't really been face
to face since the old days and this must be
ten or fifteen years ago when I used to ring
you up every second Wednesday and ask you about the
Fonterra GDT auction.
Speaker 2 (06:06):
These were a few years ago now. But look, it's
part of the landscape fan, but like yourself, Jammie, part
of the landscape of New Zealand, real new zone. Now.
Speaker 1 (06:12):
Wow, for how much longer? That is the big question? Hey, Calvin,
thank you very much for your time.
Calvin Wickham, chief executive of Balance. I'll start with you.
They are going to hand out, when I say handout,
payback whatever one. We want to call it a tax
free capital return of two dollars per share. Now, I
saw your eyes light up at the prospect of all
those dairy farmers with all that money and a ten
(00:20):
dollar payout, and they're really wanting to cook with gas.
I shouldn't mention gas to you, should I But it's
going to be good for the rural economy.
Speaker 2 (00:29):
Yeah, good afternoon, Jamie. Absolutely, I think we're riding a
real wave of confidence now as it is. I'm really
pleasing to see how Springs started off. And I suppose,
subject to the shareholder vote, if they never two dollars
of goes out, the a casual mink stillars for those
Fonterra farmers and the rest of the sect. Beautiful to see.
Speaker 1 (00:47):
Well, I think it'll be a done deal. It's been
well signaled and Fonterra farmers have had about a year
to digest this one. As I said Myles Hurrell, coming
a wee bit later, you've come out with your annual
results this morning, and I guess that the eye catching
number was the eighty eight million dollar right down you've
had on your Copoony gas to your rea plant due
(01:08):
to the uncertain availability and affordability of a New Zealand
natural gas.
Speaker 2 (01:13):
Yes, and that is the frustrating, this important part, because
behind that number was a really good year. We had
a really good season, beautiful autumn. Underlying cash flow was strong,
we paid down debt, good good earnings before tax. But
then at the end of the year we had to
consider the Copoony asset. I think it's been well telegraphed
in New Zealand, the gas issues that we're facing all
of us, number of industries, not alone, and sitting there
(01:37):
looking at the future value of the asset. If you
haven't got gas, you can't get an income from it.
So the accounting the standards was to write that asset down.
Speaker 1 (01:45):
The Capoony Aurea plant was, or it used to be
in the good old days, a duel in the balanced
crown certainly is now a liability.
Speaker 2 (01:53):
That's not a liability. But I think if you look
back over the history, when you make money at Caperny
and you can manufacture locally for lower than the international price,
so it's had good years and it's had weaker years
as well. It's disappointing not to have that resilience of
nitgien production in New Zealand if we had to close,
But we're not looking to close at the moment. We're
just ridden the asset value down to zero and we're
(02:15):
still going.
Speaker 1 (02:16):
Asketball plant for a few months.
Speaker 2 (02:18):
We're trying not to. We're still in discussion for a
three month short term gas contract and then we might
have to look for a four month shut down.
Speaker 1 (02:26):
So effectively we could end up importing all of our area, could.
Speaker 2 (02:30):
End up putting all of our nitrogen yip that supports
our agriculture business. That's a potential outlook here.
Speaker 1 (02:35):
And I know that Greenpeace don't like nitrogen, don't like
it one, but the New Zealand primary sector, the pastoral
part of it anyhow, is so dependent on nitrogen fertilizer.
And I remember hearing a fact that nitrogen fertilizer effectively
feed something like half of the world's population.
Speaker 2 (02:53):
I think ye, we mentioned it is critical to feed
the world. Look, we can import, but it would be
good to have some resilience here. So we are work
can still on plans for future nights in production in
New Zealand. We had been thinking of post gas and
when I started in the role in lesson two years ago,
I was told, no problem, gas wall, we head of
twenty thirty five, twenty forty. We're here, we own twenty
twenty five. Facing initiae, that's really just rapidly come towards
(03:15):
us as a country. But we are thinking of what
we can do post gas. How do you produce nights
in New Zealand In the meantime we'll cover with imports,
not just so U rare. Of course there's all the
other forms of night gen, DAP and other products these
days as well.
Speaker 1 (03:28):
Maybe the White Knight to come and to save you
was going to be into Pocky tonight. Shane Jones Drill
Baby Drill.
Speaker 2 (03:34):
Will be supportive of initiatives to have more gas. We
think it's the transition fuel and for Shane at least
he's standing out there and looking to try and make
a difference.
Speaker 1 (03:43):
Hey, the what one thing? And I used to be
a shareholder of Balance or it's what its predecessors were.
I think it was the Southland co Operate to Fertilizer
Company or something back in the eighties when I was
a young farmer. We always used to look forward to
our rebate on our shares. No rebate this year.
Speaker 2 (04:02):
No rebat this year. I mean, at the end the
board looked, had a hard look at it. The underlying
operating performance was good. But when you take an eighty
eight million dollar impairment on your gasesset, putting thing was
doue to hold the funds and the balance sheet for
the uncertainty head and keep the strong balance sheet.
Speaker 1 (04:17):
Nominal share value for balanced shares is nine dollars. And
we've got another big agricultural or big primary sector company,
the Alliance Group, which is going through the process of
well getting in some recapitalization basically, but for shares bought
in the nineteen eighties or the nineteen seventies for a dollar,
they might be worth a dollar twenty six if you're lucky.
(04:39):
So I guess you're getting some capital growth with your
balance shares.
Speaker 2 (04:43):
At least we had done. I mean, the share value
went up a couple of seasons ago from eight ten
to nine dollars, and even with the impairments of that,
it's unimpacted. You know that the balance sheet is strong,
equity position is good. We paid that debt so there's
no change to that shaar price and we've still got
an overage in terms of the net asset value backing
on those years.
Speaker 1 (05:00):
How good is this season going to be for pastoral farmers?
Speaker 2 (05:03):
Oh, we think it's going to be great. We're really
looking forward to it. Spring's already firing up. We've already
seen parts of the sectors like some catch up if
you like in sheep and beef. Are your top dressings
after a good start? Daeries looking good? So we're confident.
I think I'm sort of I wouldn't be surprised if
we're ten percent up in spring versus last year.
Speaker 1 (05:20):
Hey, when do you move out of your Mount MONGANII premises.
Speaker 2 (05:22):
We're going to stay there in terms of the national
support office, but the factory will close around November and
we'll move to a distribution hub from there. So what
are you doing with the land while we still need
it for the storage and distribution for the next period?
For sure?
Speaker 1 (05:35):
Sure you're sitting on a gold mine there.
Speaker 2 (05:38):
Well, we still need it for storage and distribution. It's
close to the port, bring the product, the costs from
the port and distribute it out to the heartland and
the Waycatto up north, so I think we'll be there
for a while yet.
Speaker 1 (05:48):
Okay, Calvin, welcome. Thank you very much for taking time
out of your busy day to come in and see
us alive in the Taronga studio. It's good to catch
up again because you and I haven't really been face
to face since the old days and this must be
ten or fifteen years ago when I used to ring
you up every second Wednesday and ask you about the
Fonterra GDT auction.
Speaker 2 (06:06):
These were a few years ago now. But look, it's
part of the landscape fan, but like yourself, Jammie, part
of the landscape of New Zealand, real new zone. Now.
Speaker 1 (06:12):
Wow, for how much longer? That is the big question? Hey, Calvin,
thank you very much for your time.
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