RSS
Twitter
Linked In
News In
News
Linked In
RSS
https://twitter.com/Agrimoney
http://www.newsnow.co.uk/h/Industry+Sectors/Agriculture

You are viewing 1 of your 2 complimentary articles.

Register now to receive full access.

Already registered?

Login | Join us now

Elders flags 'profound' revival - but 'mixed' outlook hurts shares

Twitter Linkedin

The rebound in shares in Elders stalled after the veteran Australian agribusiness group tempered enthusiasm over a "profound turnaround" in its fortunes by cautioning of "mixed" operating conditions ahead.

The feedlots-to-farm retail group, unveiling a 10-fold rise to Aus$38.2m in earnings for the year to the end of September, said that it could now "draw the line" on a difficult period in its 176-year history provoked by overexpansion and heavy borrowings ahead of the world financial crisis.

The group, which lost a cumulative Aus$1.6bn from 2009-13, has sold off businesses in areas from banking to car parts in an effort to stave off collapsing under the weight of its debts.

"Elders' turnaround has been profound," said Mark Allison, the group's chief executive, who after being appointed last year had termed 2014 "a year of survival for Elders".

The year to the end of September 2015, "however, was a year of stabilisation and growth," he said.

'Mixed operating conditions'

Nonetheless, Elders shares closed down $6.7% at Aus$4.35 in Sydney, in a decline attributed in part to simple profit-taking after a tear in the stock on the group's revival.

The shares, at Monday's closing price were up 81% so far this year, and earlier touched a four-year high of Aus$4.76.

However, Elders also cautioned of "mixed operating conditions for the next year", citing the prospect of a strong El Nino, which is linked to dryness in eastern Australia, with potential implications for the group's farm retail business.

Furthermore, elevated beef prices were prompting some demand setbacks in the key Indonesian market.

On the more positive side, Elders flagged "positive activity" in the real estate sector, "with low interest rates and continuing local and foreign investments".

Improved profits

In the year to the end of September this year, Elders rise in earnings, on revenues up 5.8% at Aus$1.51bn, was driven by the agency division, which saw its margin rise by 13.8% to Aus$134.7m, lifted by strong livestock prices.

The division handled 9.4m head of sheep and 1.7, head of cattle, prices of which have been boosted by strong meat demand at a time when dryness had limited producers' enthusiasm for expanding herds, allowing livestock numbers to reach unusually low levels and put a squeeze on supplies.

The retail arm achieved a 3.4% rise to Aus$111.5m in margin, "due to increased winter crop demand" and operational improvements, such as a consolidation of suppliers.

The group's reported earnings of Aus$38.2m were its highest in eight years.

By Agrimoney.com

Twitter Linkedin
Related Stories

Can cotton prices extend their rally?

History suggests futures will not stay long in the 70s cents a pound. So which way will they trend?

Morning markets: Hard wheat regains premium over soft, amid US dryness worries

Kansas City wheat outperforms, as Plains precipitation worries extend to a dearth of snow cover. But Kuala Lumpur palm oil hits a 16-month low

Evening markets: Ags gain, as funds begin to get that year-end festive mood

Ag prices recover, helped by the likes of more positive comment on US export competitiveness, and some more negative talk on Argentine rains

Morning markets: Grains stage a recovery. Will it last?

Corn, soybean and wheat futures start Wednesday making headway which has been difficult to come by of late. Cotton gains too
Home | About | RSS | Commodities | Companies | Markets | Legal disclaimer | Privacy policy | Contact

Our Brands: Comtell | Feedinfo | FGInsight

© Agrimoney.com 2017

Agrimoney.com and Agrimoney are trademarks of Agrimoney Ltd
Agrimoney is part of the Briefing Media group
Agrimoney Ltd is registered in England & Wales. Registered number: 09239069