Australian Agricultural Company Limited Released its FY19 Full Year Results

Despite facing extreme operating conditions in FY19, Australian Agricultural Company Limited (ASX: AAC) has made progress in implementing its premium branded beef strategy. Today, the company has released its FY19 results in which it has reported overall revenue of $364.1 million, down by 4.1% on the previous corresponding period (pcp).

Excluding the Gulf flood event, the company’s Underlying Operating Profit increased by $37.2 million in FY19 as compared to the previous corresponding period (pcp). Further, the company witnessed an improvement of $53 million in its net operating cash flow.

Due to the extreme weather related events, 800,000 hectares of the company’s property was affected by floods, while drought conditions on other properties drove up expenses. The impact of the extreme seasonal conditions is estimated at $107 million in the FY19 year, including the $60 million in drought costs along with an estimated $47 million in livestock lost and emergency expenditure incurred in the Gulf flood event.

It is estimated that the company has suffered a loss of around 43,000 head of cattle during this tragic Gulf flood event. The company believes that the loss of these cattle will not impact its ability to fulfil supply obligations.

During the year, the company witnessed growth across key markets in Asia, launched Westholme in Dubai and opened its US commercial office in Los Angeles. As per the company’s announcement, Westholme and Wylarah revenue growth is up 6% on last year, while the company’s heritage wagyu fullblood brands are up 41%.  The company is progressing plans to mitigate the potential future impact of extreme seasonal conditions.

Today, the company has also provided further context around some of the strategic partner investments that it has made over the past few years and the capability it has been developing to support its next growth phase.

The company has informed that it has been approached by individuals or entities with ideas for potential investment solutions that it investigated with Tavistock.

These were in the areas of:

  • Assessing and monitoring genetic data
  • Feed conversion
  • Medical research and development employing bovine byproducts
  • Animal health and welfare
  • IT infrastructure, management and digital marketing
  • Data sourcing and analytics

List of AACo’s partner investments with Tavistock or Tavistock-related entities and the services they provide to AACo (Source : Company Reports)

Now, let’s have a glance at the company’s stock performance and the return it has posted over the past few months. The stock is trading at a price of $1.150, up by 3.139% during the day’s trade with a market capitalisation of ~$672.08 Million as on 22 May 2019. The counter opened the day at $1.110 and reached the day’s high of $1.165 and touched a day’s low of $1.105 with a daily volume of ~975,122. The stock has provided a year till date return of 1.36% & also posted returns of -7.08%, 22.53% & 0.90% over the past six months, three & one-month period respectively. It had a 52-week high price of $1.445 and touched 52 weeks low of $0.880, with an average volume of ~ 896,730.


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