Hot summer dries up Elders' profit
"Dry and hot weather conditions over the summer have led to a reduction in demand for agricultural chemicals across the cropping and livestock sectors," Elders chief executive Malcolm Jackman said.
Sales of farm supplies were down 10 per cent compared with the same time last year.
Also, dry conditions had resulted in reduced pasture and lower demand for cattle to restock farms.
Elders said, however, that its live export operations were performing as expected, and feedlot operations were continuing to perform strongly.
Mr Jackman said the top end of Australia had not had a normal wet season. South Australia and the western parts of NSW and Victoria had little or no rain. Western Australia did not have huge amounts.
Mr Jackman said that in broadacre cropping in summer, farmers would normally expect about four sprayings for weeds. "In most places there's been none," he said.
Mr Jackman said Elders had not quantified the expected underlying earnings loss for the six months to March 31 because there had been a reasonably good pick-up in March.
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Elders said a hot, dry summer reduced demand for agricultural chemicals and other farm supplies across cropping and livestock, which hurt its rural services and led it to expect a small underlying loss in earnings for the first half.
Sales of farm supplies were down 10% compared with the same time last year, according to Elders.
Elders reported that its live export operations were performing as expected and its feedlot operations were continuing to perform strongly.
Dry conditions reduced pasture availability, which in turn lowered demand for cattle to restock farms, Elders said.
Elders' chief executive said the top end of Australia did not have a normal wet season. South Australia and the western parts of NSW and Victoria had little or no rain, and Western Australia did not have huge amounts either.
In broadacre cropping, farmers would normally expect about four sprayings for weeds over summer, but Elders noted that in most places this year there had been none due to the dry conditions.
No. Elders said it had not quantified the expected underlying earnings loss for the six months to March 31 because there was a reasonably good pick-up in March, which affected the outcome.
Investors may want to watch Elders' updated underlying earnings figures, trends in farm supplies sales (including any recovery from the 10% fall), and performance updates on live export and feedlot operations, since these areas were highlighted as key drivers in the company's recent update.
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