Elders (ASX:ELD) shares zoom over 10% on robust 1HFY22 results

May 23, 2022 02:24 PM AEST | By Bhawna Gupta

Elders (ASX:ELD) shares zoom over 10% on robust 1HFY22 results — Image source: © Lunamarina | Megapixl.com

A look at the results of 1HFY22

Elders reported a 38% growth in revenue to AU$1,514.8 million for the six months ended 31 March.

The company said growth was fuelled by expansion across all product lines and geographies. Meanwhile, the Rural Products division was the star of the show, with sales jumping 47% to AU$312.9 million. Due to favourable seasonal circumstances, this represents high demand for fertiliser and crop protection goods in key farming regions.

Elders MD and CEO, Mark Allison, commented:

Data Source- Company announcement dated 23 May 2022

In terms of earnings, the company increased its EBIT by 80% to AU$132.8 million and its net profit after tax by 34% to AU$91.2 million.

The Elders board of directors declared a 30% franked interim dividend of 28 cents per share, up 40% year-on-year.

Other operational highlights

Data Source- Company announcement dated 23 May 2022

Road ahead for Elders

The company has updated its view to expect full-year underlying EBIT to be 30%-40% higher than full-year underlying EBIT in 2021. Elders anticipates increased production in the second half thanks to a favourable winter cropping outlook and enough soil moisture.

According to Allison, the company has developed an inventory position to meet projected increases in winter cropping demand, resulting in lower cash flow in the first half. Elders aims for a 90% cash conversion rate for the full year, similar to last year.

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