Elders Limited Sees Profit Halve in FY24 Amid Weak Livestock Market

Nov 18, 2024

Highlights

  • Elders Limited’s FY24 statutory profit fell 50% to $45.1 million, driven by weak livestock prices and subdued margins.
  • Dividends were reduced to 36¢ per share from 46¢ last year.
  • Optimism for summer crops is tempered by potential FY25 livestock volume impacts due to dry conditions in South Australia and Victoria.

Profit Falls Amid Challenging Market
Elders Limited (ASX: ELD) reported a 50% drop in statutory profit for FY24, down to $45.1 million from the previous year. The decline was attributed to weak livestock prices, reduced crop protection margins, and subdued client sentiment. Dividends were also reduced to 36¢ per share (60% fully franked) from last year’s 46¢, reflecting the challenging conditions at the time of writing.

Outlook for Summer Crops Brings Optimism
Despite the challenges, Elders expressed optimism for the 2024 summer crop season. Favourable moisture profiles in several dryland regions and average seasonal conditions in irrigated areas are expected to support crop performance. Additionally, the company anticipates a gradual improvement in rural product margins, assuming stability in crop protection prices, which experienced significant volatility in FY23.

Potential Impact on Livestock Volumes
Elders cautioned that dry conditions in South Australia and Victoria during FY24 could affect livestock volumes in FY25. This warning underscores ongoing weather-related challenges in key agricultural regions, which may continue to pressure the company’s performance.

Looking Ahead
While Elders faces immediate headwinds, its strategic focus on crop performance and rural product stability provides hope for recovery. However, weather conditions and market volatility will remain critical factors in shaping the company’s financial results moving forward.

Elders’ ability to navigate these challenges and capitalize on improving conditions will be closely watched by investors as the agricultural sector continues to adapt to evolving environmental and market dynamics.

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