Australia's largest cattle company has increased its herd size by 13 per cent and posted an operating profit of $67.4 million, which is up 35 per cent on the previous year's result.
Speaking to investors this morning, chief executive of the Australian Agricultural Company (AACo) David Harris said the company's FY23 results were "one of the strongest operating results we've seen in recent memory".
"We've increased our margins and boosted revenue by 14 per cent by securing better pricing on our [beef] brands in market," he said.
"I think we've also done a really good job to control costs in these high inflation environments."
Herd size increases
Mr Harris said the company's strategic focus on the north American market was "paying off" and that a good season across its vast portfolio of stations in northern Australia had seen its calving rates improve, and its herd size jump 13 per cent to 432,926 head.
The per-head value of the herd dropped significantly following the plunge in cattle prices seen across Australia, especially since November.
AACo's herd is now worth $112 million less per-head than last financial year, but because of the increase in herd size, the total value is about the same as last year at around $346 million.
The value of AACo's property portfolio, which covers around 1 per cent of Australia's land mass, rose by nearly $300 million bringing AACo's total net assets to $1.6 billion.
"The significant increase in fair value is a reflection of substantial market increases seen in comparable property sales, as well as the continued investment in maintaining the quality of these assets," AACo's financial report said.
AACo's statutory net profit after tax was $4.6 million, down from $136.9 million the previous year.
Selling beef and carbon credits
In the past year, AACo has generated $7.3 million in carbon credits through its "Beef Cattle Herd Management Carbon Project" which it said helped the company to reduce its carbon emissions by 191,000 tonnes.
In its summary of risks to the company, AACo said there was a potential for climate change policies to impact the company and potentially restrict access to certain overseas markets.
"Whilst Australia has signed the Global Methane Pledge, the impact on AACo is unknown at the date of this report," AACo said.
"There is uncertainty over the future carbon pricing mechanisms in important markets such as the European Union, and the extent to which this could be applied to agricultural products and supported tariff barriers to hold imports on equal footing with domestic industries."
AACo said it had converted 62 per cent of the bores across its properties to run on solar power, with the aim of having 100 per cent completed by 2024.
