Friday, March 29, 2024

Elders upbeat on earnings with a positive crop outlook

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Agribusiness Elders, reporting a strong lift in sales and profit for the half year to March, is upbeat on the rest of the year with improved winter cropping conditions and good cattle prices. 

Sales at Elders were up 22% to $1.1 billion and statutory profit was 31% higher at $68.2 million. 

CEO Mark Allison says Elders is well positioned to capitalise on favourable growing conditions and livestock prices. 

The Outlook:

“Continued rainfall has lifted farmer confidence and we expect to see further strong demand for crop inputs in the second half of the year, particularly fertiliser and crop protection products.

“Commodity price increases will put some pressure on margin, but it is expected this will be more than offset by enhanced pricing techniques and other point of sale efficiencies. 

“Despite global supply chain disruptions, significant financial and operational impacts are not expected due to mitigating measures in place, such as early procurement of inventory.” 

Cattle prices are expected to remain strong, although below the record highs seen recently. 

Sheep prices are expected to fall in the medium term as the global supply of red meat increases, although increased slaughter numbers should maintain earnings. 

Wool prices will remain volatile until containment or vaccination measures to control COVID-19 are in place allowing supply and demand fundamentals to return. 

Demand for farmland real estate is expected to continue to be fuelled by a favourable commodity price outlook, low interest rates and good seasonal conditions.  

Elders’ half year results to March 31, 2021:

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