Global Agriculture

Australia’s Elders paints rosier agricultural outlook

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17 May 2023, AU: Leading Australian agricultural rural agency Elders sees a rosier outlook in the second half of the 2023 financial year because of a strong winter crop, and higher rural product margins after crop input prices stabilise.

Elders reported sales rising to A$1.7bn in the six-month period ending 31 March 2023, up by 9pc a year earlier. But its agriculture profits fell on the year over the same period, as livestock turnover increased amid drier weather but margins fell on lower prices.

Elders reported earnings before interest and taxes (ebit) at A$82.8mn ($55.4mn) in the first half of the year, down by 38pc from A$132.9mn in the six-month period ending 30 September 2022. Gross margins totalled A$306mn over the same period, down by 6pc from A$326mn in the previous corresponding period. Agricultural chemical sales were a major driver of gross margins at A$80.9mn, closely followed by agency services at A$64mn.

The firm achieved record-high earnings in 2022, despite impacts from the Covid-19 pandemic, the conflict in Ukraine, interest rate rises and increased living costs. The last three years of the La Nina weather pattern in Australia was likely the firm’s biggest driver of profit, as it weighed on cattle availability and drove up cattle prices. The firm’s ebit totalled A$121mn in 2020, increasing to A$167mn for the next financial year and soaring to A$232mn in 2022. Elders estimated its ebit to total A$180mn-200mn this year.

Elders reported a resilient performance in the first half of the current financial year against a volatile agricultural industry backdrop because of lower price volatility, weaker crop input prices and unseasonably wet weather. This contrasts with exceptionally favourable trading conditions in October 2021-March 2022, which saw firmer livestock prices, a strong real estate market and clients’ earlier-than-typical procurements of winter crop, in response to the global supply chain uncertainty. The first half of 2023 continued a similar trajectory in October-December 2022, with the industry reverting to a less volatile trading environment.

Also Read: Decrease in area under Summer Crops in the country; Paddy down by 6 percent

(For Latest Agriculture News & Updates, follow Krishak Jagat on Google News)

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