Elders slumps $303m into red

Agribusiness Elders will push ahead with sale of key units as it posted a $303 million half-year loss, due to difficult weather, depressed livestock markets and significant impairments.

Shares in Elders exited a trading halt to close down 13 per cent at 10.5¢ on Friday. This took its market capitalisation to a touch under $50 million, defying earlier news that a potential purchase of its rural services arm by rival Ruralco had been given the thumbs up.

Elders, which deals in livestock, wool, grain, farm supplies, finance and real estate, posted a net loss of $303.2 million for the six months to March 31, compared with a profit of $47.1 million for the same period a year ago.

Elders told shareholders on Friday that the sales processes for its flagship rural services and automotive interiors supply group businesses - the latter hurt by the announcement that Ford would stop manufacturing cars in Australia - were expected to be determined before the end of its second half.

Earlier in the week, the Australian Competition and Consumer Commission said it would allow Ruralco, which has a 12 per cent stake in Elders, to acquire its rival's rural services arm.

Other major shareholders in Elders are Washington H. Soul Pattinson and QBE Insurance.

John Maher chief executive of Ruralco said it had been a "very tough" six months for agribusiness companies, due to unseasonably hot and dry weather, but things were looking up after widespread rain.

Elders said impairment charges based on accounting standards and recognising the advanced stage of the sales processes had driven the statutory loss.

Elders took a $166.5 million impairment charge on the car parts business Futuris, a $52 million impairment on rural services and an additional $52 million write-down of the company's deferred tax assets.

On an underlying basis, excluding one-off items and impairments, Elders reported a half year loss of $22.8 million, compared with a net profit of $4.5 million a year ago.

Elders chief executive Malcolm Jackman said sustained hot and dry seasonal conditions across Australia and New Zealand had depressed sheep and cattle prices.

He said Elders' international trading operations were hurt by the reduction of Indonesian import quotas.

"However, recent signs of increased import volumes in Indonesia for the second half of this year are promising," Mr Jackman said.

"This assumes a return to normal seasonal conditions, execution of a strong forward shipping schedule in the international trading operations and improved production volumes flowing from the VF Commodore launch and overseas operations benefiting the automotive business."

Elders did not declare a dividend.