Wellard posts maiden profit but urges caution

14/02/2019 - 15:35

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Wellard has posted a $2.9 million profit for the six months to December, up from a $7.4 million loss in the previous corresponding period, and its first profit since listing on the ASX over three years ago.

Wellard posts maiden profit but urges caution
The profit is Wellard's first since it listed on the ASX in December 2015.

Wellard has posted a $2.9 million profit for the six months to December, up from a $7.4 million loss in the previous corresponding period, and its first profit since listing on the ASX over three years ago.

The agribusiness company’s revenue for the period was up 34 per cent to $188.2 million.

This excluded the sale of local non-core businesses La Bergerie Pre-Export Quarantine facility and abattoir Beaufort River Meats, which was worth around $13 million.            

The company also finished the period with net assets of $108.9 million – an increase of $7.4 million from the 2018 financial year-end position

Wellard exported 95,036 cattle on 12 voyages during the period, a 21,383 head increase on the prior period.

The company said this was due to a fall in Australian cattle prices for the first half of this financial year.

Executive chairman John Klepec said the lower cattle prices was one of the key reasons underpinning the positive result.

“Excellent vessel utilisation, profitable cattle trading from Australia to South East Asia and continued cost savings have been the key drivers for our improved operational and financial results,” Mr Klepec said.

However, Mr Klepec said the company could potentially be affected by the temporary closure of cattle exports from South America to Turkey, and pressure on importer and exporter margins in the trade of Australian cattle to Indonesia and Vietnam.

“These are external factors we need to manage very closely in the second half of the financial year,” he said.

“Current weather conditions in Australia, including the Queensland floods, will delay some of our planned voyages but it is not clear how much effect this will have on our full year results.”

Wellard listed in the ASX in December 2015.

Its shares were up 26.7 per cent to trade at 5.7 cents each at the close of trade.

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