- Agriculture giant Elders (ELD) nearly doubled profits over the last half-year compared to the same period the year before
- Net profit after tax increase by 90 per cent in the six months to March 31 on the back of winter crop confidence and high cattle and sheep prices
- The company says despite the COVID-19 pandemic, demand for its products has stayed strong and operations have been minimally affected
- Elders is expected to meet analyst expectations for full-year earnings and profits
- Shares in the company gained almost 10 per cent today to close at a decade-long high of $10.34 each.
Agribusiness giant Elders (ELD) nearly doubled its net profits over the last six months compared to the same time period last year.
The company revealed in its latest half-yearly report for the six months to March 31, 2020, that statutory net profit after tax stood at $52 million for the half-year. Over the same half-year period the year before, this figure was $27.4 million — marking a 90 per cent increase.
On an underlying level, net profit after tax was $47.6 million to the previous corresponding period's $28.3 million.
The profit bump was supported by a healthy increase in earnings before interest and tax (EBIT), which stood at $52.8 million at the end of March compared to last year's $34 million.
Elder said winter crop confidence, high prices for cattle and sheep, and steady earnings in its Real Estate and Financial Services arms contributed to the earnings.
Elders CEO and Managing Director Mark Allison said the company has "prospered" despite the volatile COVID-19 market conditions and the Black Summer bushfires in late 2019.
"The first half of FY20 has been tumultuous, with devastating bushfires across large parts of Australia, the COVID-19 pandemic, and conversely, drought-breaking rain across many parts of Australia," Mark said.
"Whilst difficult, these events have proven yet again the resilience of our people and our industry, and our ability to rise to the challenge," he said.
He said demand for the company's rural products remained strong despite the pandemic and solid rainfall in Eastern states has had a positive impact on Elders' operational performance.
What's coming up?
Looking ahead, Elders said it expects to deliver a full-year financial result of between $96.5 million and $112.9 million in EBIT and between $85.8 million and $102.9 million net profit after tax.
According to Elders, this is largely in line with analyst expectations.
The company admitted social distancing measures and government restrictions might impact real estate, wool, and livestock sales. Nevertheless, the company said supply chains are currently operating with minimal disruptions.
Shareholders seemed impressed with today's half-yearly results, with Elders shares gaining 9.88 per cent to close at a decade-long high of $10.34 each.