upgraded its FY22 guidance following a strong performance in all product areas and geographies during the six months to March 31.
The Australian agribusiness reported a net profit after tax of $91.2 million, up 34 per cent from the prior year period. Its earnings before interest and taxes (EBIT) rose 80 per cent to $132.8 million.
This result was led by sales in rural products, up 47 per cent driven by strong demand for fertiliser and crop protection products, following favourable seasonal conditions across key cropping regions.
The company upgraded its full year underlying EBIT to be 30 to 40 per cent above the prior year period, versus the 20 to 30 per cent increase it announced to the market on March 14.
Elders said it expects to benefit from a positive winter cropping outlook with sufficient soil moisture for improved production in the second half.
“Lower cash flow in the first half reflects that we have built an inventory position to allow us to meet anticipated increases in winter cropping demand,” said chief executive officer Mark Allison
“Cattle and sheep prices are expected to remain high, benefitting the Agency business and off-setting anticipated lower volumes resulting from feed availability and livestock restocking.”
However, Elders said its guidance is subject to a range of variables including potential supply chain disruptions from Covid-19 and geopolitical events, unexpected changes to seasonal conditions and severe weather events, and unexpected changes in commodity prices
Shares in Elders (ASX:ELD)
are trading 10.9 per cent higher at $15.19.