Elders (ASX:ELD) has announced its financial results for the year ended 30 September 2024. It reported a challenging year marked by fluctuating market conditions and subdued client sentiment, particularly in the first quarter.
The company is a leading agribusiness servicing rural and regional Australia, providing agricultural products, services, and advice.
Revenue declined by 6% to $3.13bn, while underlying earnings before interest and tax fell 25% to $128m. Net profit after tax to shareholders dropped 55% to $45.1m. These results reflect the impact of lower livestock prices and reduced demand for crop protection products early in the year, though a recovery in livestock markets and improved trading conditions in the second half provided some relief. Costs rose 14% to $509.6m, driven by acquisitions and investments in growth initiatives, further pressuring margins.
The company emphasised its focus on diversification, which allowed it to partially offset regional and product-specific challenges. Notable achievements included the launch of Elders Wool, a state-of-the-art wool handling facility, and the expansion of its geographic footprint through 13 acquisitions and 21 additional points of presence. Despite these efforts, return on capital fell to 11.3%, down from 16% the previous year.
The board declared a final dividend of 18 cents per share, bringing the total dividend for the year to 36 cents, down from 46 cents in 2023. This reflects an elevated payout ratio of 88%, attributed to the lower earnings base.
On the sustainability front, Elders reported progress toward its emissions reduction goals, including renewable energy projects and trialing electric vehicles in its operations.
The company also highlighted the pressures from increasing debt levels, with net debt rising 49% to $690.5m, partly due to acquisitions and transformational project investments.
Looking ahead, Elders anticipates improved market conditions and client sentiment in FY25, supported by better seasonal conditions and livestock price recovery. However, it acknowledges ongoing cost pressures and the need for operational efficiencies.
Mark Allison, Managing Director and CEO, stated: “Our diversified model and commitment to sustainable growth ensure we remain resilient through industry cycles. We are focused on maintaining a strong foundation for future growth.”
