Aust Ag Defies Lower Sales to Post Higher Profit

While meat and cattle sales were lower at Australian Agriculture Co in 2020-21, the beef giant still managed to boost its profit as the price for Wagyu beef rose.

Aust Ag (or AACo) told the ASX that profit for the 12 months to March 31 climbed 45% to $45.5 million.

It said the gains came after a year of cost-cutting, higher property prices, and improvements in both cattle and meat sales per kilogram on lower volumes.

Livestock values improved from last year due to price gains on non-Wagyu and Wagyu livestock, offset by a reduction in the total herd due to the drought and the Gulf country floods a couple of years ago.

“In line with the historical low herd levels seen in the Australian national cattle herd, AACo experienced lower calving in prior periods due to drought and the (2019) Gulf flood event,” the company said.

“These headwinds are still being felt through the supply chain.”

Wagyu beef revenues fell with the decline in production volume over the year, with meat and cattle sales down 20% at $265.5 million.

However, revenue per kilogram rose, consistent with the company’s branded beef strategy, with Wagyu fetching an average $15.50 a kilogram.

AACo owns a number of properties, feedlots, farms and a processing facility comprising around 6.4 million hectares of land across Queensland, the Northern Territory, New South Wales and Western Australia.

Property values continue grow over the year with AACo recording a net $105.2 million increase in the fair value of its pastoral property and improvements, bringing the value of this portfolio to $915.8 million.

The total value of its assets rose 10% to $1.59 billion. Net assets rose above $1 billion for the first time.

There’s no dividend and the shares eased 0.8% to $1.21.

About Glenn Dyer

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.

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