Elders predicts sale and improved performance for second half
- Outlook for second half of financial year more favourable
- Elders Rural Services sale process in final stages
- Elders half year results impacted by difficult seasonal conditions, depressed livestock markets, and impairments
- Elders Limited (Elders) has released its half year results, announcing the sale process for the Rural Services business has progressed well and is in final stages.
Elders Limited Managing Director, Malcolm Jackman, said final bids for Rural Services are expected shortly, and an outcome for the sale is expected to be determined before the end of the second half.
“Elders is very happy with how the sale has progressed, and we recognise and acknowledge the ongoing support of our clients, staff and financiers through this process,” Mr Jackman said.
Mr Jackman said difficult seasonal conditions impacted the Rural Services business primarily in farm supplies and livestock, but a return to normal season conditions should see an improved performance in the second half.
“Similarly to many of our clients who know only too well what a tough year it has been in terms of season and livestock prices, the Rural Services business experienced sustained dry and hot seasonal conditions across Australia and New Zealand over the past six months, resulting in reduced demand for farm inputs and depressed sheep and cattle prices.
“International Trading operations were also impacted by a reduction in Indonesian import quotas and re-setting of long haul shipments, however recent signs of increased import volumes in Indonesia for the second half of this year and a strong forward shipping schedule to other international markets are promising,” Mr Jackman said.
Significant non-cash impairments impacted the statutory profit, with a recorded statutory loss of $(303.2) million for the 2013 first half to 31 March and an underlying loss after tax of $(22.8) million.
“While seasonal and market conditions affected the underlying profit, Rural Services achieved an improved operating cash flow of $24.4 million from lower costs and reduced working capital.”
Elders will advise the market of further progress with the sales of Futuris Automotive and Elders Rural
Services as appropriate.