Elders narrows half year loss to $10m

AGRIBUSINESS Elders has narrowed its half year loss to $10.2 million and expects continued improvement over the full year.

Elders is starting to reap the benefits of extensive "non-core" asset sales, restructuring and management changes as it nears its aim of becoming a "pure" rural services provider.

Its result for the six months to March 31 was an improvement on a $303 million loss in the same period a year earlier.

The latest loss included one-off items totalling $16.8 million linked to businesses that the company no longer operates and the value of assets it is looking to sell.

The first-half loss of 2013 contained $280 million in impairments and writedowns, including a $167 million impairment charge on Elders' Futuris Automotive car interiors business which the group has since sold.

Excluding one-off items, Elders' underlying profit of $6.7 million was up from an underlying loss of $23.7 million in the prior corresponding period.

Managing director Mark Allison said Elders was on the way to generating value for its shareholders, after posting a $30.4 million turnaraound in underlying performance.

Every part of the business delivered improved results in spite of variable seasonal conditions, which included drought in much of north eastern Australia.

"We see this as the start of the 'pure play' agribusiness journey and a sound outcome for the first six months although we do acknowledge there is a little way to go," Mr Allison said.

Elders had cut costs and debt, improved margins, and lifted cash flow.

The company's traditional operations - livestock, wool, real estate and grain - had made the biggest contribution to improved margins.

Elders said seasonal and market conditions were encouraging, and recent rainfall had provided a good start to the winter cropping season.

Cattle prices were recovering, sheep prices were strong, and demand from Indonesia, Vietnam, China and eastern Europe for live cattle was healthy.

"The second half outlook is positive, subject to seasonal conditions, and we expect ongoing improvement against last year's results," Mr Allison said.

He said Elders had improved its financial management of the live export trade and had reduced the costs associated with running the business.

In the first half, there was strong demand for Australian cattle, particularly from Indonesia as a result of a significant increase in import permits for Australian cattle.

Demand for breeding cattle remained strong, particularly dairy heifers from Australia and New Zealand for Chinese milk production.

Shares in elders were 0.5 cents higher at 12 cents at 1317 AEST.

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