Investors accepted yesterday’s news of big losses from the Australian Agricultural Company (AACo) for the year to March.
Thanks to drought and floods the beef and cattle group was hit by $107 million in one-off losses.
The company’s full-year results released on Wednesday revealed the vast flood event in February that hit north Queensland from Townsville to the Gulf Country killed about 43,000 head of cattle and cost AACo an estimated $47 million.
But as large a loss as that was, the impact of the drought was greater – an estimated $60 million according to the company.
Combined the losses dragged the company’s 2018-19 result deeply into the red. The company said its statutory result before interest, tax, depreciation, and amortisation (EBITDA) was a loss of $182.7 million, compared to last year’s EBITDA loss of $35.3 million.
The market did not appear worried by the AACo result, with shares in the company up 2.2% to $1.14 (which helped account for most of the 3.55% rise in the value of the shares since the start of 2019).
“AACo faced weather-related events that were unlike anything seen before – 800,000 hectares of our property were affected by floods, while drought conditions on other properties drove up expenses,” CEO Hugh Killen said in yesterday’s profit release.
On an underlying basis, excluding the impact of the North Queensland floods, AACo reported an underlying operating profit for the year of $23.7 million, up from a $13.5 million loss in 2017-18.
“While we have room for improvement in our results when you exclude the Gulf flood event, our underlying operating results are positive year on year, despite absorbing an additional $60 million in drought-related costs,” Mr. Killen said.
