Elders has announced an after tax profit of $40.5m for the six months to March 31, marking a return to positive territory after a $395m loss last financial year.
The after-tax profit was boosted by a $34.4m windfall arising from a long-running but ultimately successful appeal by Elders against an amended tax assessment from the Australian Tax Office, which was determined in the company’s favour earlier this year.
Elders recorded an underlying profit after tax of $6.1m for the period, down from $7.5m in the corresponding period of 2010-11.
Earnings before interest and tax were slightly lower at $21.3m, compared to $22.1m last year.
The lower underlying EBIT was attributed to a reduction in equity income from 49.7pc investment in the Agricultural Land Trust forestry business.
However, EBIT from Elders’ core Rural Services business increased from $20.2m to $21.1m.
Elders managing directo Malcolm Jackman said the benefits of a rebound in the contribution from trading operations, controlled costs and higher farm supplies income had been more than offset by the lower activity levels in its livestock, wool and real estate agency markets during the period.
“Rural Service’s results for the first half are solid given the circumstances” he said. “Trading activities, particularly our live export operations were the highlight, lifting their underlying margin generation by 15%.
“Network results were consistent with what would be expected given the deferral of activity and sales brought about by flooding and falling prices for fertiliser and AgChem.
“Notwithstanding this, our farm supplies sales and income continued to grow year-on-year” Malcolm Jackman said.
Australian network sales revenue of $576.1m was higher than the 2011 first half figure of $575.2m.
Gross debt at March 31 was $435.9m, compared to $427.1m at the beginning of the period.
Malcolm Jackman said the current June quarter would be influential in the determining full year earnings outcomes.
“We have entered our peak Rural Services sales period with relatively good conditions and soil moisture, although rainfall for winter cropping to date has been below season’s averages in many regions.
“We are seeing ongoing recovery in crops such as cotton, rice and horticulture where growers have been able to consolidate their position with renewed water availability.
“While livestock agency is expected to continue to be challenging, we anticipate live export will continue to demonstrate growth over the previous year’s results.”
More details on Elders H1 2011 result can be viewed on the ASX website by clicking here.