THE SHEEP’S BACK
Ruralco cashes in as demand for wool outstrips supply
AGRICULTURAL services group Ruralco has made a record full-year profit as it reaps the benefits of strong demand for wool.
Ruralco says its rural supplies business benefited over the past year from good rainfall in Victoria, Tasmania, South Australia and southern New South Wales as farmers bought more crop inputs such as fertiliser and weed killer.
High prices for cattle, sheep and wool boosted earnings.
Posting Ruralco’s results for the year to September, chief executive Travis Dillon said sheep, lamb and wool prices remained high because overseas demand outstripped supply. The size of sheep flocks in Australia and New Zealand drove prices, Mr Dillon said.
Sheep and lamb are exported all over the world but most of the wool goes to China.
Mr Dillon said global wool stocks were not sufficient to meet demand.
“There’s not enough sheep — the Australian flock of sheep is tens of millions of head down on what it was in its peak,” he said. “It goes back to the deregulation of the wool price.”
Ruralco’s net profit of $22.4 million for the year to September rose from $4.3 million in the previous year.
Its underlying profit, which excludes one-off items, rose 95 per cent to $26.2 million, while revenue was up 2 per cent at $1.83 billion.
The company is paying a final dividend of 6c, fully franked, up from 2c a year ago.
Eliza MacMillan throws a fleece in the shearing shed on her family farm.