This article is from the Australian Property Journal archive
A JUMP in sales boosted ASX-listed Australian Agricultural Company (AACo)’s revenue, but its operating profit declined due to continued challenging market conditions.
Revenues came in at $195.5 million, up from $167.1 million, while operating cashflow also lifted on the prior corresponding period (pcp) from $2.6 million to $4.3 million.
“The challenging market conditions experienced in recent periods are continuing, with a sharp increase in beef supply in some regions and restrained consumer spending across the global economy,” AACo said.
Those factors impacted the overall Wagyu meat sales price per kilogram, which was down 17%, a major contributor to the operating profit margin being 7.8% lower compared to the pcp to 10.3%, and a fall in operating profit from $30.1 million in the pcp to $20.2 million.
“However, through the company’s strategic approach to product allocation and investment in its Wagyu brands and marketing activities, AACo was able to largely maintain its presence in key markets.
The result was strengthened by a 37% increase in kilograms sold, driven by increased supply from the Goonoo property expansion, “further highlighting the benefits of building a resilient and flexible supply chain”.
Managing director and CEO David Harris said the results were reflective of the current challenging environment.
“Our strategy of recent years has been designed to build a better beef program at AACo, which includes improving both the resilience of our supply chain, as well as the performance of our brands in market.
“We are seeing some of the outcomes of that hard work in these results.”
An improvement in cattle sales was also a factor in the positive cash result. Cattle prices also boosted the unrealised mark-to-market value of its herd, with a rise of $34 million contributing to a statutory net profit after tax of $23.6 million and positive statutory EBITDA of $64.5 million.
Net tangible assets listed to $2.55 per share.