AACo lifts cattle sales but prices weak
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The nation's largest cattle producer, Australian Agricultural Company (AACo) is on track to post a 2.5 per cent increase in sales for the year.
However its earnings are being hurt by weak cattle prices as the company desperately tries to become profitable again following several years of losses.
Its physical performance metrics were tracking well, AACo said, including weather and pasture conditions that supported weight gain and brandings results.
However, the increase in market prices that it forecast back in August on the back of increasing global meat prices did not eventuate, with prices actually falling further.
The decline having started 12 months ago.
The Eastern Young Cattle Indicator showed prices were down 55 cents a kilogram since August while in the same period live export prices have fallen 23 cents a kilogram live weight.
The live export trade represented 70,866 cattle out of the 223,678 sales in the 11 completed months of 2012, with AACo estimating full year sales of 245,678 compared to 239,771 in 2011.
It said its final full year result will depend on market prices, but it expects to produce an operating cash flow surplus.
AACo posted a first half loss of $4.1 million in August.
The cattle breeder has more than 680,000 cattle and sells Wagyu and premium beef in more than 20 countries.
Its shares were 1.25 cents weaker at $1.255 at 1330 AEDT.