September 25, 2020


QAF Limited denies news of sale offers



Food supplier QAF Limited said on September 22 that it expects its Australia-based pork production business to fare slightly worse in FY2020.


Contrary to the press reports, QAF said, during its sale process launch in August, that it has not received offers for its meat producer Rivalea and the rest of its Australian primary production.


Rivalea's net revenue went down from A$404 million (US$285,317,834) - announced on June 30 - to A$395 million (US$278,972,979), said QAF's latest bourse filing. Earnings before interest, taxes, depreciation and amortisation (EBITDA) could come to A$36 million (US$25,424,361), excluding fair-value changes on biological assets, against the guidance for A$38 million (US$26,838,112).


"The updated FY2020 projections are nevertheless higher than the FY2019 net revenues and EBITDA of A$384 million (US$271,206,190) and A$21.1 million (US$14,897,253)," QAF said.


However, the company added: "As the COVID-19 pandemic is an unprecedented event and the situation is evolving, the impact cannot be reliably estimated with certainty at this point in time. Losses arising from the pandemic are not covered by insurance policies in Australia."

Meat production is QAF's second-largest business segment.


Based on unaudited management accounts as of August 31, the net book value of the pork production assets that QAF plans to sell came up to some A$160 million (US$112,975,185), including shareholder loans, but excluding net external debt.


QAF said that reports in the newspaper The Australian - which claimed that the company had received offers of A$80 million (US$56,485,802) to A$100 million (US$70,607,252) - were incorrect and described the sale process for Rivalea is still "in its preliminary stages."


"Any sale will be subject to conditions including anti-competition clearance and approval under Australian law, as well as shareholders' approval," QAF added.


It noted: "Shareholders and other investors are advised to refrain from taking any action in respect of their securities in the company, which may be prejudicial to their interests and to exercise caution when dealing in such securities."


- The Business Times