Ruralco warns of profit fall

Agribusiness expects full-year profit to fall sharply on lower livestock prices.

Agribusiness Ruralco Holdings (RHL) expects its reported annual profit to fall sharply as a result of lower livestock prices and lower sales of agricultural chemicals due to drought.

Ruralco expects its net profit for the year to September 30, 2013, will range from a breakeven result and a $1 million loss.

Ruralco reported a profit of $13.8 million in 2012.

Ruralco managing director John Maher said the business had "performed credibly in terms of activity volumes and cost management".

"Performance was impacted by markedly lower livestock commodity prices and reduced first half agricultural chemical sales, a product of hot and dry seasonal conditions during the first half," he said in a statement to the Australian Securities Exchange.

"Pleasingly, rural supplies returned a solid second half performance and an increase in full year gross profit."

Mr Maher said sheep and lamb prices had recovered a little in the second half of the fiscal year.

But beef prices were still under pressure due to reduced rainfall and feed levels in northern and parts of eastern Australia which had resulted in underweight stock and reduced marketing outlets in northern areas.

Ruralco's reported net profit for fiscal 2013 will include an approximate $9 million hit from non-recurring items, including a $7 million writedown of Ruralco's investment in agribusiness Elders (ELD) and costs associated with its proposed acquisition of Elders Rural Services.