What’s your beef? AACo bottom line hit by plunging beef prices but outlook strong
The market has turned on beef producer Australian Agriculture and drastically cut the value of its herd leading to a $105 million loss for the half year.
Australian Agriculture's half year profit nose-dived. (File image)
That compared to a $51 million profit for the same time last year.
The company said falling prices led to the unrealised mark-to-market decline of $175 million of the herd. It said prices were at a four-year low.
While the bottom line was heavily impacted, the company’s operating result was a $30 million profit and AACo said it revenue had increased in the past three quarters.
Managing director David Harris said the results would still put AACo in a good position to navigate the market.
“These are pleasing results considering the headwinds faced this period,” he said.
“They were achieved through a disciplined focus and determination to drive excellence across the value chain.”
Meat sales revenue increased by more than $9 million and volumes were up 15 per cent.
The market was impacted by herd liquidations in the US and Korea which had increased supply but Harris said this would also present an opportunity as supply tightens and herd rebuilding starts.
“The second half of the year sees AACo enter its 200th year of operation. It’s a significant milestone that we look forward to commemorating,” Harris said.
