February 1, 2012
AAco optimistic about Indonesian cattle trade outlook
Australian Agricultural Company (AAco) remained upbeat about its future cattle exports to Indonesia despite the country's export ban last year and its subsequent announcement to lower cattle imports.
Releasing AAco's full-year profit on Tuesday (Jan 31), managing director David Farley said greater self-sufficiency in beef has been ''an ambition for Indonesia for some time now''. But there would still be a strong demand, he said.
Meanwhile, AAco was pursuing opportunities in other south-east Asian markets including Vietnam and the Philippines, and increasing exports to Europe.
Farley estimated last year's ban on exports to Indonesia cost AAco between AUD5 million (US$5.29 million) and AUD8 million (US$8.47 million), but said it was still not clear whether the federal government would pay compensation.
In year two of a three-year turnaround strategy, AAco reported a big jump in net profit of AUD10.5 million (US$11.1 million) for the 2011 calendar year, up from AUD904,000 (US$957,303) in 2010, but did not declare a dividend.
RBS Morgans analyst Belinda Moore said AAco's result beat her expectations but she questioned the large operating cash outflow and continuing high debt levels that resulted in an interest expense of more than AUD30 million (US$31.8 million) a year.