18-Jul-2014 TANDOU EARNINGS & VALUATION UPDATE FY2014

Listed agribusiness and water investment company Tandou Limited (ASX:TAN) today reported a projected Total Comprehensive Income result of $8.5-$9.0 million for the year ended 30 June 2014 and an estimated $0-$0.5 million Net Profit After Tax ($6.0 million profit 30 June 2013). 

Following the Company's change of accounting policy from cost to fair value for land, buildings and property/structural improvements for the year ended 30 June 2014, Comprehensive Income will include approximately $8.5 million from revaluation gains net of tax. This valuation uplift excludes any adjustment of water entitlement values. 

As this is the first year of carrying these assets at fair value the total uplift of $8.5 million has been booked in this financial period and includes prior year gains. The year on year valuation gain of land and property improvements is approximately $3.0 million after tax. 

The estimated Net Profit earnings follows lower cotton yields experienced across both Tandou cropping operations as reported in the Company's harvest update on 26 May 2014. Further impacting on the result was approximately $1.0 million of finance and overhead costs associated with the Bundygoola property purchased during January 2014. The financial statements remain subject to audit.

Tandou CEO, Guy Kingwill, said "the lower projected profit result is disappointing with the Company's revenue being significantly impacted by cotton yields well below expectations. Despite the difficult season, it is pleasing that both the farming operations and water business have now continued to report profitable segment earnings (EBIT) for the last 5 financial years."

"Water entitlement markets have demonstrated strong capital growth over the past 12 months. Based on independent valuations for 30 June 2014 the Company has seen unrealised gains of approximately $8.7 million on its water portfolio asset values during the period. Consistent with prior years these water valuation gains have not been booked in the financial accounts" Mr Kingwill said.

Further details will be included in the Company's Preliminary Final Report due to be released in late August.

Enquiries:

Guy Kingwill
CEO/MANAGING DIRECTOR
Ph. 03 5018 6500

TANDOU LIMITED
ABN 81 001 014 562




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