Elders says the outlook for agriculture is positive, after a large tax win helped the agribusiness and automotive interiors supplier return to profitability.

Elders on Monday reported a net profit of $40.5 million for the first half of its 2011/12 fiscal year, compared to a net loss of $14.6 million in the prior corresponding period.

The result was boosted by a $34.4 million gain from one-off items, including a $58.3 million gain arising from a successful objection to an Australian Taxation Office (ATO) tax assessment.

That gain was partly offset by a reduction in deferred tax assets, losses from discontinued forestry operations and other costs.

Elders’ underlying profit after tax was $6.1 million, down from $7.5 million.

The company’s rural services and automotive operations slightly improved their contributions to underlying EBIT (earnings before interest and tax) but income from the jointly-owned Agricultural Land Trust fell.

Elders chief financial officer Mark Hosking said above-average rainfall across parts of Australia had affected the rural services results for February and March.

Customers had kept their livestock on the paddock, where there was abundant feed to fatten the animals, and the rain had made it impractical to transport animals for sale.

The high Australian dollar had also weighed upon demand in the live export market, which had flow-on effects in domestic markets.

In many areas it had been too wet to access paddocks for spraying, which had affected demand for herbicide and fungicide, the company said.

Falling prices for fertiliser had resulted in farmers deferring purchasing until they could buy at a lower price, which had affected the volume of fertiliser sold.

“While the short term is impacted by these events, the outlook for agriculture is positive given resulting improved soil moisture and water availability,” Mr Hosking said.

Sales of fertiliser had rebounded strongly in April and May.

Mr Hosking said activity in the real estate sector was subdued although offshore interest remained.

Foreign interest in Australian rural property continued to attract more than its fair share of attention and conspiracy theories.

Mr Hosking said there was disquiet about overseas ownership at the end of the 19th century.

“However, at that point everyone was concerned about the English,” he said.

Shares in Elders were 0.5 cents lower at 20 cents at 1352 AEST on Monday.