Elders flags $18m profit hit

Group estimates discrepancies in livestock reporting will affect inventory values.

Elders (ELD) flagged an $18 million hit to net profit due to discrepancies in reporting of livestock values in its live cattle export division.

In a statement to the Australian Securities Exchange, Elders said it estimates the discrepancies will drag inventory values down $18 million, and negatively affect underlying net profit after tax in aggregate by approximately the same amount for balance dates already passed including the year ended September 30.

Elders said it does not believe the issues will have a material impact on its outlook for future financial periods and it does not expect the issue to recur. 

The company's investigation into the discrepancies, their causes, the financial implications and whether there has been wrongdoing continues. 

Seven senior employees in its live cattle trading division resigned this week, including the general manager of the cattle export trading division. 

Chief executive Malcolm Jackman earlier said Elders did not know if there was a link between the accounting discrepancies and the employees' planned move to rival Ruralco (RHL). 

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