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Highlights
- Elders’ half-year profit jumped 190%
- Share price dropped despite earnings growth
- ASX dividend stocks remain in focus
Elders (ASX:ELD), a long-standing name in Australia’s agribusiness sector, surprised markets with a sharp rise in its half-year profit, yet its shares headed in the opposite direction during early trading. The company posted a 190% jump in statutory profit after tax, but despite this impressive figure, it was the worst-performing stock on the S&P/ASX200 index in early morning trade.
By 10:28am AEST, Elders shares were down 7.58% at $6.10. Over the past 12 months, the stock has declined by 27.07%, reflecting a mix of external pressures and changing investor sentiment.
For the six months ended 31 March, Elders reported a statutory profit after tax of $33.6 million, up significantly from $11.6 million in the prior corresponding period. This improvement was largely driven by higher livestock prices, improved production margins, and better sentiment in the agricultural sector. Additionally, revenue rose by 5% to $1.41 billion, while underlying EBIT surged 67% to $64.3 million.
Elders also declared an interim dividend of 18 cents per share, partially franked, putting it on the radar of income-focused investors looking at ASX dividend stocks. Despite this, the market response remained muted, pointing to broader concerns affecting investor confidence.
The company noted that acquisitions in real estate services and disciplined cost management contributed positively to its earnings performance. However, not all segments delivered equally. Its retail products business saw pressure on gross margins, largely due to ongoing dry weather in regions like South Australia and western Victoria, along with heightened local competition.
The latest earnings are seen as a recovery from HY24, which had been marred by subdued client sentiment, weak livestock prices, and softer margins in crop protection.
Looking ahead, Elders remains cautiously optimistic. The company stated that the outlook for Australian livestock is “sound,” with minimal expected impact from proposed tariffs. The regional residential property market is also projected to remain robust, supported by stable conditions and an anticipated average winter crop.
Elders' current positioning within the S&P/ASX200 underscores both its resilience and the complex dynamics facing businesses in the agribusiness sector. Despite short-term volatility, it continues to be a name of interest within income and agriculture-focused portfolios.
