AAco posts US$48 million loss in 2009
Beef producer Australian Agricultural Company Ltd (AAco) has posted an annual net loss of A$53.7 million (US$47.6 million) for 2009, but is confident it could turn around the financial performance this year.
AAco said in January that extreme weather, a stronger Australian dollar and subdued cattle prices had forced it to downgrade its profit guidance to a loss of between A$53 million (US$47 million) to A$60 million (US$53.25 million).
Droughts and flooding led to serious cattle losses, significantly higher rates of calf mortality and reduced herd weight gains. All these had contributed to the poor 2009 result. AAco also faced below-average cattle prices and the negative impact of the strong Australian dollar.
In 2009, AAco produced 50.8 million kg of beef, down 19.2% on-year. Cattle deaths were greater than those in 2008. About 15,000 head of cattle were lost in floods, resulting in reduced cattle revenue.
During 2009, 176,328 head of cattle were sold at an average A$957 (US$849.3) per head, compared to 252,354 head in 2008 at A$731 (US$648.6) per head.
AAco revenue for the year fell to A$157.5 million (US$139.7 million) from A$236.9 million (US$210.16 million) in 2008.
Chief executive David Farley, who was appointed on December 1, said AAco could return to profitability soon.
Summer rainfall had been good; the Australian dollar was depreciating from its highs, which would help exports; the global supply of beef was tighter after drought, flood and high global oil prices; and demand for beef was rebuilding after falling during the global financial crisis.
The key drivers are improving dramatically, and AAco is likely to see continual improvement on those, said Farley.
AAco also was focusing on improving the performance of its live cattle and boxed beef operations, and the cost of producing an animal. He said the company is focusing on how it can get quicker turnaround, quicker production off the land within the calendar year that AAco operates.
