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Elders increases half-year profit

Business

Agribusiness Elders expects to improve on last year’s annual profit despite a mixed outlook for the second half of its fiscal year.

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Elders says the winter cropping outlook for northern and western Australia is positive, with average winter production expected in southern Australia.

Elders on Monday booked a half-year net profit of $24.6 million – up 55 per cent on $15.9 million the previous year.

In a statement to the ASX, the Adelaide-based company said its position was underpinned by an uplift in retail earnings, strong livestock agency performance, and increased commission earnings from broadacre real estate sales.

Elders chief executive officer Mark Allison said high cattle prices had driven both the higher livestock earnings and real estate demand for large cattle-farming properties.

However, he warned of challenges in the immediate future.

“Mixed operating conditions for the remainder of the financial year are anticipated, with encouraging market and
seasonal conditions,” he said.

“Increased competition and higher supply costs in the live export short haul market will continue to put pressure on earnings, particularly in Vietnam and Indonesia. Opportunities in the China feeder slaughter market will become clearer over the next six months.

“Cattle and sheep prices are expected to remain strong, due to tight supply and high demand.

“Strong activity in rural real estate is expected to continue with interest rates remaining low.”

– with AAP

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