Elders Limted has cited weak industry-wide conditions as the main reason for an expected loss for the first six months of its current trading year.
Worst affected have been farm supplies sales and livestock agency activities in its Australian network.
In a statement to the Australian Stock Exchange on Wednesday, chief executive officer Malcolm Jackman said it was clear that the year-to-date numbers in those areas were lower than the same time last year.
He said the numbers were expected to result in a small underlying EBIT loss for the consolidated group, before mark-to-market adjustments, for the six months to 31 March 2013.
“Dry and hot weather conditions over the summer have led to a reduction in demand for agricultural chemicals across the cropping and livestock sectors which sees farm supplies sales down 10pc compared with the same time last year,” Mr Jackman said.
“Similarly, dry conditions have led to reduced pasture and lower restocking demand in the livestock agency business which sees commissions down 28% compared with the same time last year” he said.
“The reduction is predominantly driven by a reduction in cattle prices (16%) and sheep prices (39%).
Cattle volumes are down 8pc where as sheep volumes are up 5pc.”
Despite the impact to Australian network operations, Malcolm Jackman said that the International Trading and New Zealand operations continue to perform as expected.
“Live export operations are expected to deliver a performance in line with current market conditions and expectations in global live export volumes. Feedlot operations continue to perform strongly,” Mr Jackman said.
“Elders’ New Zealand network is performing well with results to date ahead of the previous year, despite ongoing drought on the North Island.
“This has been driven largely by a strong wool performance and lower costs which are more than compensating for the weaker result in farm supplies and livestock,” he said.
Elders lodged the advice, below, with the Australia Stock Exchange late yesterday, in relation to specuialtion about a takeover offer from Ruralco:
"Elders Limited (ASX: ELD) notes that Reuters published an on-line article today, 20 March 2013, entitled “Australian regulator reviews Ruralco's takeover of Elders”. Elders also notes that the Australian Competition & Consumer Commission (ACCC) yesterday commenced an informal review of a Ruralco proposal “to acquire from Elders Limited 100% of Elders Rural Services Limited and its subsidiaries that are engaged in the business operations of Elders agribusiness divisions.”
"Elders is concerned that the headline of that article might give the impression that a formal takeover proposal had been received from Ruralco (ASX: RHL). No such takeover offer has been received from Ruralco."
"As Elders announced to the ASX on 29 October 2012, the Board of Elders has commenced a process to sell Elders Rural Services. That process has attracted a high level of interest and continues with a number of parties on a confidential basis. No one interested party has been granted preferential status by Elders."
"Elders will not be making any announcement to the ASX in connection with that sales process until required by its continuous disclosure obligations to do so."