THE Australian Agricultural Co, the world’s largest beef producer, this morning posted a half-year statutory net profit after tax of $47.9 million for its six months to September 30.
The result represented a $1.9m decrease on the same period last year.
The company reported operating pre-tax earnings of $13.9 million, a $2.4m increase on the previous corresponding period. Net operating cash outflows of $34.5m included a $41.5m investment in live cattle inventory that will be monetised in the second half of the current financial year.
Managing director Jason Strong said building on earlier results, AA Co’s branded beef sales as a percentage of total sales continued to rise, going from 86 percent to 92pc in the half year.
AA Co regionally-launched its flagship luxury Westholme and Wylarah brands in Singapore in early October, and plans to launch these brands into other key markets over the next 18 months, Mr Strong said.
“This represents our initial drive towards changing the global luxury beef segment,” he told investors and analysts in a briefing this morning.
“As our vertical integration strategy takes shape, we are fundamentally changing the way we sell and deliver our products to consumers. This strategy will lead to increased sale prices,” he said.
The company reported a 25pc reduction in production costs by taking advantage of strong seasonal conditions across many of its pastoral areas, as well as reducing operational costs from its strategic decision to own cattle right through the supply chain.
“The company continues to innovate to improve the quality, consistency and predictability of its beef production,” Mr Strong said.
During the last half-year, the company also co-founded and invested in a San Diego based biopharmaceutical reagent company, Nucleus Biologics, which supplies pharmaceutical companies with products based on raw materials from AA Co’s Livingstone Beef processing plant.
In addition, the company formed a scientific advisory board under the chairmanship of Dr Megan Clark, former chief executive of CSIRO, to review and guide AA Co’s future innovation and technology programs.