AAco downgrades guidance, appoints CEO
Australian Agricultural Company Limited (AAC) downgraded its guidance for the second half of the financial year ending 31 December 2009 due to the strengthening Australian / US dollar position. The beef cattle producer also announced the appointment of David Farley as managing director and chief executive officer.
AAco said it initially forecast a profit after tax, for the second half ending 31 December 2009, assuming that cattle prices as at August 2009 remained steady through to year end.
“The Board of AAco has reviewed its second half earnings forecast in the light of a strongly appreciating Australian / US dollar position and guidance is now given that the Company does not expect any significant earnings before interest and tax contribution in the second half of the financial year on the Company's year end results,” the company said.
AAco said for every 1% change in AAco’s total herd valuation its EBIT is potentially impacted by $4 million.
Cattle prices had fallen 9 to 11% since August 2009, the company said.
”The cattle market is unpredictable and significant mark to market adjustments can occur in the period leading up to 31 December 2009, depending on rainfall leading into the wet season and other factors,” AAco said.
“The actual earnings adjustments will not be known until the end of January 2010 on completion of a full herd analysis and valuation.”
The company said Mr Farley would commence his role on 1 December 2009.
AAco said Mr Farley was formerly managing director of Colly Cotton Limited and also formerly CEO of a US cotton growing and marketing co-operative Calcot.
At the close of trade yesterday, AAco shares were trading at $1.455.
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