- Thanks to Australia's rapidly rebounding agriculture sector, Elders (ELD) has posted an 80 per cent jump in profit for the 2020 financial year
- Statutory profit after tax for the year came to $122.9 million - a significant increase over 2019's figure of $68.9 million
- The company said the improved performance was driven by gross margin increases across all state geographies and products, as well as various cost reduction measures
- With demand for farmland expected to grow and a newly signed trade deal offering exporters better access to diversified markets, the company is bracing for significant growth opportunities
- Shares in Elders were up 0.084 per cent to $11.88 each yesterday before trading was stopped due to a technical glitch
Thanks to Australia's rapidly rebounding agriculture sector, Elders (ELD) has posted an 80 per cent jump in profit for the 2020 financial year.
Statutory profit for the period came to a total of $122.9 million, representing a marked improvement compared to the 2019 financial year's figure of $68.9 million.
Sales revenue also grew 29 per cent from $1.63 billion last year to roughly $2.09 billion.
The company said the improvements were due largely to gross margin increases across all state geographies and products, in combination with various cost reduction measures and disciplined capital allocation.
Elders' Rural Products division was notably successful over the year, with the acquisition of Australian Independent Rural Retailers (AIRR) generating $44 million in wholesale gross margin - a figure the company said was well in excess of forecasts.
Mark Allison, Managing Director and CEO of Elders, said the results were particularly pleasing given the drought and bushfire events that occurred in the first half of the year.
"Our solid business foundations and strict financial discipline, together with a commitment to ensuring the safety and prosperity of clients, communities and staff across Australia allowed us to succeed despite challenging operating conditions in FY20," he added.
With such a minimal impact from the COVID-19 pandemic, Elders even elected to cancel a $50 million credit facility it established in May this year to withstand potential business interruptions.
Looking ahead, the company noted that recovering crop environments, strong cattle prices and growing demand for farmland are expected to result in a favourable market.
However, reduced consumer demand for apparel as well as disrupted clothing supply chains are likely to drive lower near-term wool prices.
More recently, a newly signed trade deal between Australia and 14 other countries is anticipated give exporters better access to major international markets with rising incomes, as well as the chance to diversify away from China.
"It's a nice calming influence to be honest," Mark said in a recent interview.
"We've got good relations with a number of the countries that are included in it, but I think what it says to all of us is we've now got formal options with the ASEAN countries, 800 million population," he added.
Shares in Elders were up 0.084 per cent to $11.88 each yesterday before trading was stopped due to a technical glitch.