November 2, 2009

BEEF grazier Australian Agricultural Company Ltd (AAco) has appointed David Farley as its chief executive officer and managing director, while also downgrading its guidance for the second half of the year due to the rising Australian dollar.

The appointment will be effective as of December 1, said AAco.

In August, the Queensland-based company said CEO Stephen Toms and COO David Connolly would leave the company because AAco required a new perspective.

Farley was formerly managing director of Colly Cotton Ltd and chief executive of a US cotton growing and marketing co-operative, Calcot.

The final details of Mr Farley's employment contract were being completed, given the need to consider recent Federal Government legislative changes that affect the application of performance incentives.

AAco had also reviewed its second half earnings forecast in light of a strongly appreciating Australian dollar against the US currency.

The company will no longer expect any significant earnings before interest and tax (EBIT) contribution in the second half of the year to the year-end result.

AAco said major Australian cattle price indices had fallen around nine to 11 percent, with recent falls largely due to the historic high level of the Australian dollar.

The company said its earnings are highly sensitive to year-end cattle price assumptions, and AAco's EBIT is potentially impacted by A$4 million (US$3.6 million) for each one percent change in AAco's total herd evaluation.

AAco posted a net loss of A$30.3 million (US$27.5 million) for the first half of 2009.