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Seen, not herd: AACo cheers a good wet season after prices cut value

Statewide

Australian Agriculture’s bumper operating profit has been reduced by $112 million at the bottom line through a reduction in the value of its cattle herd.

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The Brisbane-based company posted a 335 per cent increase in its full year operating profit of $67.4 million on revenue of $313 million (up 14 per cent).

But lower prices for cattle meant a mark-to-market reduction in value.

This drove the statutory net profit after tax to $4.6 million and EBITDA was down also to $49 million. It said its operating profit and cash flow were a more accurate reading of its performance.

Once again, no dividend was declared. Despite that, investors lifted the company’s shares by 10 per cent this morning.

However, it also experienced “an exceptional” wet season that has led to strong pasture growth which was expected to lead to increased kilograms produced.

“This will help offset increased input costs brought about by inflationary pressures,” it said.

The company’s net assets increased to $1.6 billion through a $294 million increase in the value of its properties.

Managing director David Harris said it was an excellent operating result that illustrated progress in the company strategy.

Branded meat sales in the north American market were up 22 per cent.

The company has now started a major increase in its production capacity by expanding Goonoo, south of Emerald which would allow it to improve efficiency and boost supply to global markets.

“It will help us meet the growing demand we are seeing around the world and builds on the strong foundations we have put in place over recent years,” Harris said.

 

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