29/02/2016 - 15:56

Wellard downgrades profit outlook

29/02/2016 - 15:56

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Shares in agribusiness Wellard have fallen 9.2 per cent as the company revealed its first financial result since listing in December last year, while also flagging a reduction in expected net profit.

Wellard downgrades profit outlook
A Wellard export vessel, the Ocean Outback, in Fremantle.

Shares in agribusiness Wellard have fallen 9.2 per cent as the company revealed its first financial result since listing in December last year, while also flagging a reduction in expected net profit.

Net profit after tax for the 2016 financial year is now forecast at $42.5 million, about 8 per cent below what was flagged in the prospectus.

Revenue for the six months to December was $275.5 million, with a statutory loss of $23.9 million.

That takes IPO and restructuring costs into account.

Earnings before interest, taxes, depreciation and amortisation was $26.9 million and net profit after tax $13.5 million.

Those numbers were driven by three key factors, the company said, including the falling exchange rate impacting interest and depreciation.

Further issues were a delay in commissioning its new vessel, the MV Ocean Shearer, and repairs for two existing vessels.

Additional costs from restructuring and the IPO resulted in a statutory loss of $23.9 million.

Wellard managing director Mauro Balzarini said the company had successfully raised almost $300 million via its initial public offering and transitioned from a private to listed company structure in the period.

“Our pro-forma numbers provide a clearer picture of operating performance as our statutory result was skewed by the one-off corporate restructuring costs associated with the IPO process," he said.

“We look forward to normalising our fleet in March and bringing additional shipping capacity, the MV Ocean Shearer, into service in April.

“It will be the fifth custom-designed and built vessel in Wellard’s fleet.

Wellard typically experiences a seasonal bias in its earnings towards financial year quarter four with an increase in livestock export volumes driven by Asian religious festival periods.

“We expect that to be the case again this year so the MV Ocean Shearer’s addition to our fleet will be perfectly timed."

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