By its own admission, 2013 has been a horrible year for agribusiness Elders.
Chairman Mark Allison said the group’s result in the year to September, a statutory loss of $505.2 million and an underlying loss of $63 million, were the worst that Elders had ever reported.
“As is clear from the 2013 annual report, Elders has not performed as it should,” he told shareholders at the company’s annual general meeting in Adelaide.
“While I have received encouragement from clients who express their appreciation and satisfaction with the service and advice they receive from Elders, the company’s financial performance is unsustainable.”
Elders was hit by costs from its restructure, dry weather that affected the sales of agricultural goods and livestock, and accounting discrepancies in its live cattle export operations.
Mr Allison said the restructuring of Elders into a company focussed purely on agriculture was almost complete, and it was time to focus on its operational performance.
Elders would start by getting its core domestic business right, he said.
The sale of its forestry assets, and the Futuris automotive interiors business, was almost complete, meaning that from March 2014 the cash generated by the rural services operations would not be required to help fund other businesses.
Elders was also working to reduce the capital intensity of the remaining agribusiness operations, Mr Allison said.
“We will maintain our presence and activity but with a model more closely aligned to the traditional role of intermediary between producer and buyer performed by Elders, and less of the higher risk principal involvement,” he said.
Elders had begun its 2013/14 fiscal year with improved earnings compared to the prior corresponding period, shareholders were told.
The year had begun with abnormally dry conditions in many agricultural regions, and this had been reflected in farm supply sales.
But an improvement from Elders traditional agency businesses in livestock and real estate, with costs taken out as a result of restructuring in 2012/13, and a solid result from trading operations had contributed to stronger operational earnings.
Shares in Elders closed steady at 11 cents.