But the poor results were still a major achievement in light of worsening seasonal conditions, uncertainty over the outcome of the Iraq kickbacks inquiry and management changes, AWB new managing director Gordon Davis said.

Davis, just nine weeks into the top job at the troubled agribusiness, would not make a forecast for the current year to September 2007, but said the latest results showed that all the company's businesses were profitable.

"We are not giving any guidance on the profit number for 06/07," he said.

One-off items responsible for slashing AWB's net profit included 23.7 million dollars in costs associated with the year-long Iraq bribery probe, and redundancy and restructuring costs of 10.2 million dollars.

Those burdens combined with drought and substantially reduced domestic trading caused AWB to cut its final dividend to four cents per share from 13 cents the year before, the company said, reducing the year's total payout to 20 cents from 29 cents.

Davis said the results had not factored in extra costs that could result from litigation arising from the Iraq-UN inquiry's report due Friday or a possible new US congressional inquiry into AWB's activities in Iraq.

AWB's underlying net profit, excluding one-off items, was down 25.7 percent to 105.77 million dollars in the year to September, in line with a July forecast, the company said. It posted an underlying profit before tax, amortisation and one-off items of 147.1 million dollars, down 21 percent on the previous year.

"The lower underlying profit has been impacted by adverse seasonal conditions and a lower contribution from domestic grain trading," it said in a statement.

The farm products and services supplier repeated its domestic wheat production forecast for 2007 of between nine and 11 million tonnes, roughly 45 percent the size of its May crop estimate.

Davis also revealed that the company was abandoning the once lucrative Iraq market as a priority for its drought-depleted export pool, which is expected to come in at just four million tonnes after domestic consumption.

"In a sense, with a very small crop, the question of selling wheat to Iraq is moot for the immediate future," Davis said.

Baghad placed a trade ban on AWB in February as a high-level inquiry investigated an alleged 290 million dollars in kickbacks paid to Baghdad under the UN oil-for-food program.

The inquiry's results are expected to be tabled in parliament next week and are likley to trigger a massive shakeup of the country's wheat marketing arrangements, with AWB set to lose its right to veto bulk exports by other companies.

Should that occur, it will up to the government and wheat growers to decide on a future marketing framework and the AWB was preparing itself for change, Davis said. Davis took over from former managing director Andrew Lindberg, who quit after denying knowledge of the kickbacks before the inquiry.

Despite the company's dissappointing results, AWB shares managed to advance three cents to close at 2.56 dollars in a firmer overall market. mb/bmm

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