Rural services company Ruralco's profit has plunged almost 60 per cent as it struggles with hot and dry weather conditions, lower livestock prices and costs relating to its bid for rival Elders.
The Hobart-based company, which provides a range of goods and services to farmers and livestock traders, reported a net profit of $5.7 million for the year to September. This compared with $13.8 million the previous year.
Excluding one-off costs relating to a restructure and efforts to take over debt-laden rural merchandiser Elders, Ruralco's net profit fell 44 per cent to $8.7 million. The fall in profitability for the country's biggest rural services group follows rival Elders' disclosure of a $505 million loss earlier this month.
Chief executive John Maher said a stronger grain harvest and growing demand for livestock would boost profitability in the current year. "As there is currently good international demand for many of Australia's key commodities, including beef, lamb, grains and our dairy herd genetics, any improvement in seasonal conditions should drive production, which will in turn benefit Ruralco." Ruralco shares rose 10¢, or 3.1 per cent, to close at $3.31.