The Australian Agricultural Company announced its 2018 full year results.
As flagged in the Company’s Trading Update on 4 April 2018, the results include Operating EBITDA of $13.6 million and Statutory EBITDA loss of $35.3 million. The Company’s reported earnings results for the 2018 financial year are generally consistent with the preliminary result ranges announced in April.
Earnings were impacted by a number of factors, including increased competition affecting certain parts of the product portfolio, reduced volumes due to less reliance on external supply, and increased input costs driven by dry weather conditions.
Overall price growth achieved in the Luxury/Prestige brand segment has been pleasing in the context of increased competitive pressures. The performance of the Westholme and Wylarah brands was particularly strong. This improvement supports the Company’s brand and marketing strategy, and management intends to accelerate this growth through targeted investment behind AACo’s strategic brand portfolio.
Despite the challenging seasonal conditions resulting in higher input expenses, cost of production per kg increases were largely a result of the one-off livestock attrition adjustment Page 2 announced in H1 FY18, and management believes there is potential upside to be achieved through capturing process improvements and efficiencies across the supply chain.
The Company continues to benefit from a robust balance sheet, with comfortable headroom remaining within existing bank facilities. The debt refinancing completed in September 2017 achieved a reduction in the cost of funds and more flexible facility terms.
The balance sheet has been further strengthened by an improvement of 4.5 per cent in the carrying value of AACo’s property portfolio.
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