September 30, 2003
Australian Agricultural Body Ready For Higher Beef Prices
The Australian Agricultural Company says it's in a strong position to take advantage of an expected rise in cattle prices.
The news comes as the company prepares for a federal court finding on the $491 million sale of Stanbroke Pastoral Company to Nebo Holdings, expected to be delivered in Sydney on Tuesday. AACo is seeking an injunction to stop the sale of Stanbroke to Nebo and for the tender process to be reopened.
In his annual statement to shareholders, chairman David Hills said the company, which has 418,000 cattle over 19 properties covering 6.5 million hectares, was performing well despite the recent drought. "We are in a strong position to take advantage of the upturn that is expected in cattle prices," Mr Hills said.
AACo's chief executive officer Peter Holmes a Court said a decision to defer cattle sales due to the drought appeared to have paid off. "Demand from the US for Australian beef remains strong but has been unsettled by high levels of domestic US cattle production, rapid appreciation of the Australian dollar and a single case of BSE in Canada," he said.
In Japan, demand and prices are slowly returning to pre-BSE levels. South Korea continues to be strong, and live exports into Indonesia recently hit record levels.
Mr Holmes had said in August he expected the company's net profit to increase by 15 to 25 per cent this financial year, following a break in severe drought conditions and an expected recovery in stock and prices.
The company posted a net profit of $18.3 million for 2002/03, down from $20.6 million in the previous year but in line with market expectations.