Australian Ag Results Disappoint
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Shares in Australian Agricultural Company (AAC) fell 7% yesterday after the company produced weak first-half results.
AAC revealed a loss of $37.7 million after marking-to-market the value of its livestock inventory.
The company earned a profit of $48 million in the same half year of last year.
Meat sales fell 26% to $170 million from $196 million a year earlier while cattle sales rose 9.1% to $27.3 million from just over $18 million and not enough to offset the slide in meat sales.
Total sales dropped to $197.2 million from $214.1 million.
The shares ended at $1.445 at the close in a weak market.
Chair Donald McGauchie said in yesterday’s statement “AACo has come a long way from being a cattle company. We made a decision that to drive shareholder value we had to become a branded business. Tough - but highly considered– decisions were made as we have executed on the strategy.
"Today’s results demonstrate the progress that has been made and the work still being done. Most importantly the team is consolidating the strategy and ensuring excellence in its execution.”
“While there are some external headwinds, we are pleased with the traction we are achieving. Our priorities now are completing our executive line-up, continuing the investment in our systems and processes and ensuring that we continue to improve performance across the business” Mr McGauchie said in yesterday’s statement.
The company said “current external challenges validate AACo’s strategy to focus on building a branded business.”
"Challenges currently affecting the business include increased competitive dynamics in certain markets, a higher Australian dollar, higher input prices, including feed, and an elevated cattle price environment for Livingstone Beef.”
Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.
At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.