AAC 9.55% $1.95 australian agricultural company limited.

Good Report Card

  1. 184 Posts.

    Results for the 9 months to 31 March 2002 up 26% to $23 million
    compared with the previous corresponding period

    Revised NPAT forecast due to lower 4th quarter cattle price
    expectations - new forecasts remain in excess of prospectus by 10%

    Cashflow and balance sheet remain strong - record herd expected at 30
    June 2002
    31 MARCH 02 31 MARCH 01 CHANGE

    Revenue 65.8 56.1 17.4%

    EBIT 22.9 18.2 25.6%

    Beef sold
    (kg millions) 19.1 17.7 8.0%

    The Australian Agricultural Company (AACo) today announced unaudited
    earnings before interest and tax (EBIT) for the 9 months to 31 March
    2002 up 25.6% to $22.9 million compared with the previous
    corresponding period.

    Cattle revenue for the 9 months rose 18.8% to $63.9 million from beef
    sales of 19.1 million kilograms. Hard numbers at period end were

    Excluding the impact from the application of mark to market
    accounting standards, EBIT increased 58.7% to $22.5 million over the
    previous corresponding period.

    Cattle sale price expectations for the 4th quarter have been reduced,
    primarily due to US quota limitations, weaker Japanese demand and
    drier weather conditions. The Company is limiting the impact of these
    effects through the transfer of cattle across its portfolio of
    properties and by expanding its domestic market sales program.

    The Company has lowered its previously revised full year forecasts at
    the half year announcement on 12 February 2002. The Company now
    expects to exceed the full year net profit after tax (NPAT) forecasts
    in its July 2001 prospectus by 10%.

    At 31 March 2002, the Company had gearing (net debt/equity) on a book
    value basis of 40.6%, and EBIT cover of 8.3 times interest.

    After quarter end the Company announced the continuation of its 'gate
    to plate' strategy, through the formation of Chefs Partner and the
    acquisition of Griffin's Meats. Chefs Partner is a joint venture
    (with Queensland processor Nolan Meats) that now supplies AACo beef
    directly to the food service sector, primarily restaurants and
    hotels, under the Griffin's brand.


    AACo Chief Executive Officer, Mr Peter Holmes a Court said that the
    group was responding well to a volatile cattle market, and was
    benefiting from the capacity to move cattle across its property
    portfolio. "The strength of our property portfolio, combined with our
    growing ability to supply the domestic market, should allow the
    Company to exceed prospectus forecasts despite the tougher conditions
    being experienced in the second half of the year."


    Cattle sale prices received during the 3rd quarter were in line with
    management forecasts announced at the half year on 12 February 2002.
    A mark to market reduction of 7.5% was applied to the herd at 31
    March 2002.

    The 4th quarter assumption is for no further mark to market
    adjustment to closing herd values at 30 June 2002. Accordingly, the
    revision to the full year forecasts is based on a net cattle price
    increase for the full year of 6.8%.

    Input costs, specifically insurance, fuel and grain prices, are
    currently higher than forecast in the prospectus and, as noted
    previously, are likely to result in higher operating costs.

    The revised full year EBIT and NPAT forecasts, detailed below, remain
    ahead of the forecasts contained in the prospectus dated 6 July 2001.


    EBIT 37.0 35.7 + 3.7%
    NPAT 23.2 21.1 + 9.9%
    EPS (cents)* 13.7 n/a n/a
    EPS (cents)** 12.5 n/a n/a

    * Based on weighted average number of shares

    ** Based on shares on issue at period end of 185,012,000

    Management's previous forecast full year was EBIT of $43.7 million
    and NPAT of $28.1 million.

    The impact of cattle sales (both number of sales and timing of
    sales), cattle sale prices in the 4th quarter, and cattle prices at
    30 June 2002, remain critical in meeting AACo's full year 30 June
    2002 forecast.

    The medium term outlook for beef prices is expected to remain at
    current levels into the first half of FY03. AACo will continue to
    mitigate the effects of reduced international demand through an
    increased focus on domestic markets.

    AACo will host an investor/media conference call at 3pm EST today, 6
    May 2002. To join the conference call, please contact Helen Wood, on
    +61 2 8211 0610, or email [email protected]

    A presentation is available at www.aaco.com.au/html/presentations.htm
    and will be the basis for the 3pm briefing.

    For further information contact:

    Peter Holmes A Court Luisa Catanzaro
    [email protected] [email protected]
    Tel: (02) 8211 0610 Tel: (02) 8211 0610

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