The Bull

Sunday 23

September, 2018 2:38 PM



Elders shares slump as big dry bites

Elders shares slump as big dry bites

Elders says unseasonally dry conditions around Australia have hit deman for chemicals and affected cattle prices but maintains earnings will be "consistent".

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By AAP 06.07.2018 04:35 PM

Shares in rural services group Elders have plunged after the company delivered an earnings update that signals its full-year earnings will be flat due to the impact of drought across large parts of Australia.

Elders shares dropped $1.28, or 15.4 per cent, to $7.06 on Friday - a three-month low - despite the seasonal update saying the company remains "on track to deliver consistent earnings" for the year to September 30.

Elders said its current expectation is for underlying earnings of $70 million to $74 million compared to $71 million in 2016/17, while underlying net profit is expected to be between $59 million and $63 million, compared to $58.4 million a year ago.

In its statement, Elders said as of the end of the June quarter, retail earnings had been affected by "unseasonally dry conditions across many parts of Australia" which had reduced demand for farm chemicals.

"Additionally, as previously foreshadowed, easing cattle prices have impacted Elders' Agency earnings," the company said.

"However, sheep and wool prices and volumes have remained strong and consistent with the prior year, and the dry conditions have allowed feedlot utilisation to remain at high levels."

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