Live cattle exporter Wellard has announced the sale of one of its mid-sized ships to Israeli company Dabbah Slaughterhouse for $US26 million ($A35 million).
Fremantle-based Wellard told the market this morning it had signed a binding agreement to sell the seven-year-old livestock vessel M/V Ocean Outback to Dabbah, following an ongoing review of its fleet to match market conditions.
The sale is expected to be completed in the first quarter of FY18, with the proceeds to be used for working capital.
“Wellard regularly reviews the make-up of its fleet to match it to current and expected future capacity demands,” chief executive Mauro Balzarini said.
“Wellard had received several approaches from parties interested in purchasing our vessels, so we used the opportunity to progress the sale of the M/V Ocean Outback to right-size our fleet.
“Wellard continues to work through very difficult trading conditions, which have remained soft in the second half of the financial year.
“As previously announced, there will be trading losses reported in the company’s year-end accounts.
“The company is reviewing the carrying value of its assets, and subject to valuation, this may result in impairments when it finalises its accounts at year-end, which, together with expected higher trading losses, will lead to a second half loss higher than the first half.”
Mr Balzarini said the scale of the loss was still yet to be determined, however, notwithstanding a tough year, Wellard was managing its way through.
‘‘The completion of the company’s $53 million capital raising, our ‘costs out’ program, and the sale of the M/V Ocean Outback leaves Wellard with an improved liquidity position,” he said.
“The market signals for the beginning of the new financial year FY18 are more promising than FY17, which leads us to expect some improvement in performance in FY18.”
Wellard shares were 2.6 per cent lower to 18.5 cents each at 11am.
