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Australia's largest pastoral company AACo confirms massive loss in end-of-year results

Amy Phillips and Jodie Gunders, Wednesday May 22, 2019 - 14:12 EST
ABC licensed image
Wondoola Station in flood, showing floodwaters up to the eaves of buildings. - ABC licensed

The nation's biggest cattle company says extreme weather conditions across northern Australian has cost it more than $100 million in losses.

The Australian Agricultural Company (AACo) runs more than half a million cattle across 24 stations and feedlots in Queensland and the Northern Territory to breed and fatten stock for export consumption.

In reporting its full year financial results, the chief executive officer Hugh Killen confirmed a statuary EBITDA (earnings before interest, tax, depreciation and amortisation) loss of $182.7 million.

He also told investors the company had sustained stock losses of 43,000 head in record flooding on several Gulf of Carpentaria stations in February.

"It was absolutely unprecedented.

"A one-in-100-year flood, huge volumes of water which caused significant impacts not only to AACo but to the entire region," Mr Killen said.

"We believe we have lost somewhere around 43,000 head at a cost of $42.4 million."

Stock losses were recorded on Canobie, Dalgonally, and Carrum but it was the 2,500 square kilometre Wondoola Station, located 130 kilometres south of Normanton, which experienced the biggest impact.

The cattle property recorded its highest flood levels ever, which forced the evacuation of station staff as water rose to the eaves of buildings.

"Our people are extremely resilient, my pride in the team is immense in how they handled that situation, it was horrendous," Mr Killen said.

"We're still in the process of how we rebuild the Wondoola homestead complex, where's the right place to put it, we don't just want a repeat of before".

Millions to be spent on repairs to infrastructure

Mr Killen said fences and water infrastructure damage would cost the Australian Agricultural Company between $6 million and $8 million to repair.

Meanwhile despite repairs continuing, Gulf of Carpentaria properties had been restocking with cattle from the Barkly Tableland company stations due to a failed wet season across the border.

"The Barkly is extremely dry so there is a large volume of cattle coming off the likes of Brunette Downs, Anthony Lagoon, Avon Downs and Austral.

"So there's a pretty significant movement of stock to the Gulf but also down to the Channel Country and some other areas which have had better rainfall," Mr Killen said.

While Hugh Killen admitted the weather challenges had been huge he said AACo's decision to suspend the operation of its Livingstone Beef abattoir south of Darwin along with the 1,824 branded beef venture had saved the company money.

"If we had those 1,824 composite steers we would have had another material hit over and above the $60 million of losses we have reported in relation to the drought and not operating the plant this year was a saving in itself as well," he said.

The company said it was still assessing what it would do with the mothballed $100 million Livingstone abattoir but said there had been considerable interest in the asset.

Overall the Australian Agricultural Company owns more than 1 per cent of Australia's land mass at an asset value of $1.3 billion.


© ABC 2019

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