Tandou reports $6m profit result

24-Feb-2011

• Operating profit before interest and tax from continuing operations $3.4 million, 65% improvement on 2009
• Reportable profit $6.0 million after adjustment for income tax benefit and impairment reversals
• $8.9 million new investment in water entitlements during 2010
• Successful establishment of 4,000 hectare 2011 cotton crop
• Commenced preparations for increased cotton plantings with water security and favourable prices

Water investor and agribusiness Tandou Limited (ASX:TAN) has reported a $6.012 million net profit after tax for the year ended 31 December 2010 (2009: $1.353 million profit), after adjustment for a net impairment reversal of $1.6 million and income tax benefit of $5.362 million.

The Company’s earnings outlook improved during the period and with an ability to now demonstrate probable future income tax profits, the accounts for the current period include recognition of a net Deferred Tax Asset of $5.362 million (2009: nil).

With further investment of $8.9 million in water entitlements during the period Tandou has continued to expand its strategic portfolio of water assets held within the Connected Murray System.

“Tandou’s water assets have continued to grow and now represent almost 43 cents per share,” said Mr Guy Kingwill, CEO and managing director of Tandou.

Tandou Farm is back in production with the successful establishment of a 4,000 hectare cotton crop to be harvested late April/May 2011.The Company’s operations have not suffered any significant losses to date from the weather events experienced across eastern Australia and Tandou does not expect to be negatively impacted as the Queensland flood waters make their way through Menindee over the coming months.

Soft commodities outlook is currently positive, particularly for cotton which has now exceeded historical price levels and inflows from flood water will keep Menindee Lakes full through the winter and underwrite water availability for the 2012 and 2013 crops. Preparations are underway to plant 6,500 hectares of cotton and 2,000 hectares of cereal for the coming season.

Mr Kingwill said, “With favourable cotton prices and water storages across the Basin approaching full or spilling the Company looks forward to at least another two seasons of cropping and profitable returns from its farming operations.”

“Tandou has evolved into a water investment business with vast assets and the option of cropping when the returns from selling water allocations become less than those available from crop production. The Company provides an attractive investment opportunity for those investors looking for exposure to both water assets and soft commodities in Australia.”

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Enquiries:
Guy Kingwill
CEO/Managing Director
03 5018 6500

Rudi Michelson
Monsoon Communications
03 9620 3333

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