Elders Ltd (ASX: ELD) Soars on Strong FY 2023 Results Despite Market Challenges - Kalkine Media

November 13, 2023 01:09 PM AEDT | By Team Kalkine Media
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The Elders Ltd (ASX: ELD) share price has experienced a significant surge, capturing the attention of ASX 200 investors. Starting the day at $6.18, the agribusiness company's shares climbed to $7.08, marking a remarkable 14.56% increase, while the broader ASX 200 is down 0.1% at the same time.

This surge is likely to be driven by the release of results for the financial year 2023, where the company showcased its resilience in the face of challenging market conditions.

Key Highlights from Elders' FY 2023 Results:

  1. Sales revenue reached $3.32 billion, reflecting a 4% year-on-year decrease.
  2. Underlying Earnings Before Interest and Taxes (EBIT) stood at $171 million, marking a 26% decline from FY 2022.
  3. Statutory Net Profit After Tax (NPAT) amounted to $101 million, down 38% year on year.
  4. The declared final dividend is 23 cents per share, with a 30% franking.

Despite the challenging financial metrics, Elders exceeded certain core performance measures, demonstrating its ability to navigate adverse market conditions. Worth mentioning here is that the underlying return on capital (ROC) surpassed management's target benchmark, reaching 16%.

The company recorded operating cash inflow of $169 million with a cash conversion of 163%, surpassing the target benchmark of 90% outlined in the company's capital management framework.

The full-year dividend payout, including the final 23 cents per share dividend, equates to 46 cents per share, providing ASX 200 income investors with a noteworthy yield (part trailing, part pending) of 6.6%.

CEO Mark Allison's Commentary:

Commenting on the results, CEO Mark Allison highlighted

“The year was met with challenging market and cost conditions and despite this, Elders achieved its second highest EBIT result in the last 10 years. This resilience was achieved due to our geographically diversified multi-product portfolio, which generated strong average earnings across the group.”

Future Outlook:

Looking ahead, Allison outlined that Elders anticipates some of the market headwinds from FY 2023 to persist into FY 2024. However, he expressed confidence in the company's ability to pursue opportunities for further growth and diversification, aligning with Elders' guiding strategy, the Eight Point Plan.

Despite the positive momentum today, the Elders share price remains down by 32% over the past 12 months.


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