Elders has forecast an improved performance during the current fiscal year after posting a substantial loss due to the decision to sell its forestry business.
The agribusiness and automotive interiors supplier reported a net loss of $395.3 million for the 12 months to September 30, which was worse than the $217.6 million loss in the prior corresponding period.
Shares in the company fell almost six per cent to a record low 24 cents after the loss was announced, in which Elders said no dividend would be paid for another year.
The company attributed the net loss to the reclassification of its forestry assets as “discontinued and current assets held for sale”, which resulted in a $391.8 million pre-tax charge.
Excluding that and other one-off charges, Elders said underlying profit for fiscal 2011 was $4.7 million, a turnaround from the $15.1 million loss in the prior corresponding period.
“The results are obviously heavily impacted by the complete and impending divestment of unprofitable and cash consuming operations, particularly our forestry,” Elders chief executive Malcolm Jackman said.
Mr Jackman said fiscal 2012 had started positively, with a strong finish to the winter cropping season and demand for live exports up.
Moreover, its automobile unit had experienced a pick-up in local volumes and new contracts in China, Thailand and the US were due to commence.
Revenue rose nine per cent to $2.36 billion, Elders said in a statement on Monday.
Elders said it expected fiscal 2012 would be a year to extend the turnaround in operational performance that started in fiscal 2011.
“I have every expectation we will see that improve,” Mr Jackman told analysts and media during a conference call.
The company also expected to “substantially complete the forestry divestment” and reduce debt and interest significantly with the proceeds.
The rural services business supplies products and services to farmers, and operates livestock, food and fibre trading in Australia and New Zealand.
Elders said on October 3 it would offload its struggling forestry business in a staged divestment.
The forestry operations were hit by weak demand due to the Japanese tsunami, uncertainty created by high exchange rates and ongoing woodchip price negotiations with Japanese buyers and damage to assets in Queensland from Cyclone Yasi.
Mr Jackson said some $26 million worth of land sales had been executed to date, adding that the company would update the market as further properties were offloaded.
