DESPITE tough global meat trading conditions, the Australian Agricultural Co delivered its third consecutive operating profit above $50 million in annual results presented this morning.

The company’s 2024-25 result displayed considerable resilience against the international meat market backdrop, with increased meat sales volumes and price helping drive the performance.

Operating profit for the year ended 31 March reached $58.4 million, up $7.3m on the prior year. This was the second-highest operating profit since 2017.

Total revenue hit $387.9m, up $51.8m, while operating cashflow was record-high at $27.1m, up $9.3m on 2024.

Operating Profit & Loss

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The result came on the back of global meat sales value up 9pc and volume up 21pc, driven in part by the expansion at the company’s Goonoo feedlot in Central Queensland, and improved pastoral conditions. Wagyu meat sales averaged $17.85/kg, down 10pc on the previous year, impacted by challenging market conditions in the first half, including the prolonged herd liquidations in the US and increased local supply in Korea. Total meat sales revenue reached $293.9m, up $25.2m on last year.

Cattle sales (distinct from beef), lifted by $26.6m, through higher branding rates and greater productivity than previous years.

The annual valuation of the company’s livestock and property assets took place in March, prior to the most recent rain event which has turned around the company’s northern seasonal prospects in some areas.

Currently totalling 456,000 head, the herd was valued this year (unrealised mark-to-market value) at $595.8m, down $15.5m or 2.5pc on last year. The value of pastoral properties grew by $46m or 3pc to $1.6 billion.

This contributed to a statutory net loss of $1.1m, but AA Co argues that operating profit is the best measure of performance, because the statutory figure is only relevant if assets are sold.

When combined with a $45.9m increase in property and infrastructure values, the statutory performance pushed the Net Tangible Assets figure up 2pc vs last year, to $2.55 per share.

Reflecting higher input costs and inflation, cost of production on beef lifted to $3.05/kg, up 5pc on the previous year. Additionally, a higher proportion of cattle moved through the finishing stages of the supply chain where costs are higher last year.

‘Leaning on its strengths’

Managing director David Harris told analysts this morning that the operating results were supported by a disciplined approach to managing costs, with spending in line with increased production and costs controlled to minimise inflationary impacts.

David Harris

“AA Co was able to lean on its strengths and the foundation built in recent years to deliver a pleasing outcome in the 2025 financial year,” he said. “It was particularly positive when placed against the backdrop that included various challenges, with dynamic markets, evolving trade conditions, price pressure in some key sales regions, supply and demand constraints and a global economy and consumer sentiment still recovering after a number of years of high inflation and low confidence.

Higher cashflow had allowed heavier investment in assets, totalling $31.7m last financial year. While that covered a range of activities across the supply chain, Mr Harris singled out the company’s ambitious solar water pumping conversion project that’s unfolded over the last five years, as outlined in this earlier Beef Central story.

While Wagyu meat sales price per kilogram was down 10pc to $17.85/kg, there were positive signs in the second half (1 September to 31 March), with the average meat sales price improving as supply dynamics and global inflationary pressures eased, Mr Harris said.

“AA Co’s ability to leverage its distribution network and strategically allocate product enables us to protect price in key regions,” he said.

“That approach becomes even more influential when conditions are shifting, and while it doesn’t insulate the company from price pressures entirely, it does put us in the best position to respond when conditions improve, as we started to see towards the end of the financial year.”

“However, while we saw incremental improvement in some product categories and sectors, a downturn in several high paying markets is indicative of the sustained challenging broader economic and market conditions.”

Sustainability

AA Co’s sustainability initiatives, including its stocking model were helping improve land condition, with increased brandings and improved cattle productivity a direct outcome, analysts were told this morning.

The sustainability program is now more embedded into business-as-usual activities, supported by key projects such as AA Co’s involvement in the Zero Net Emissions Ag CRC, and registration of the company’s first soil carbon project, which took place in the period.

Operating environment

“AA Co’s global operating environment remains dynamic,” analysts were told. “It is influenced by a range of factors, and while many are outside its control, the company has put measures in place to best respond to potential impacts. The high-quality integrated supply chain and strong global network of distributors have positioned the company well to take advantage of emerging conditions.

While the outlook for global beef sales was uncertain, the demand for Australian beef is expected to remain strong, particularly in AA Co’s key markets, Korea, North America and Europe where local supply is contracting, the company said.

• AA Co shares were trading at $1.42 after this morning’s results announcement, down from their recent high of $1.57.
• The company’s annual general meeting in Brisbane will be held on 24 July.