July 25, 2011


Australian Agricultural Company announces loss but expects end-of-year profit



The Australian Agricultural Company (AACo) expects a profit for the year, even after announcing a loss for the first half of the year, as well as not yet receiving a permit to export to Indonesia.


AACo maintained its full year guidance for EBITDA (earnings before interest, tax, depreciation and amortisation) in a range of AUD50-60 million (US$54.13-64.95 million), and AACo chief executive David Farley said AACo expected a profitable full year result.


Even so, AACo announced a net loss for the six months to June 30 of AUD12.57 million (US$13.61 million), compared to a loss of AUD12.2 million (US$13.21 million) in the prior corresponding period.


The loss included an AUD8.2 million (US$8.88 million) writedown on the value of AACo's northern cattle herd, after the federal government's intervention in the live cattle trade.


The temporary suspension of the export of live cattle to Indonesia had a substantial effect on the cattle industry, Farley said.


No Australian or global exporter of live cattle to Indonesia had been granted or approved an export licence since the ban was lifted on July 6.


Farley was not confident that exports would restart in early August because "Canberra bureaucracy" was getting in the way.


AACo said it had completed 50% of its live export program before the suspension and had forward sales at pre-ban prices awaiting shipment, but there was a risk that cattle earmarked for export could grow beyond the required weight.

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