Profits drying up

Ruralco warned that low rainfall could slash its profit in the first four months of the financial year by up to 70% from the $11 million previously expected.

The profit warning was made by Ruralco's managing director, John Maher.

The company said the profit hit relates to the first four months of its financial year.

According to the article, a lack of rain in most key agricultural regions reduced demand for farm chemicals and lowered demand for restocking livestock, both of which hurt sales and profit.

The article states that lower demand for restocking livestock had also affected livestock prices, contributing to the weaker trading conditions Ruralco is experiencing.

The article says the lack of rain has hit most key agricultural regions, although it does not list specific states or areas.

If profit falls by the reported maximum of 70% from $11 million, that would reduce profit to about $3.3 million for the first four months (a decline of roughly $7.7 million).

The article highlights that weather-driven factors—specifically low rainfall—can materially affect agribusiness earnings. Everyday investors should note Ruralco’s warning that profit for the opening four months could be significantly reduced and follow the company’s updates for any further guidance.