Wel­lard shares on horns of dilemma

Townsville Bulletin - - NEWS - TREVOR CHAPPELL

WEL­LARD shares have hit an all- time low af­ter Aus­tralia’s big­gest cat­tle ex­porter said it ex­pected an an­nual loss as high prices for lo­cal cat­tle weigh on de­mand from Asia.

Wel­lard said yes­ter­day that cat­tle prices in Aus­tralia re­mained “un­eco­nom­i­cally high” as gra­ziers hold stock and grow their herds. The high prices have re­duced de­mand from live ex­port mar­kets in South- East Asia.

“Th­ese sus­tained high prices have meant that the tra­di­tional In­done­sian and Viet­namese live ex­port mar­kets have been de­pressed, with buy­ers re­duc­ing the num­ber of cat­tle pur­chased and not will­ing to ab­sorb or pass on the in­creased costs,” Wel­lard said yes­ter­day.

Wel­lard said its pre­vi­ous ex­pec­ta­tions of mar­ket im­prove­ment at this point in the sea­son had not ma­te­ri­alised, with con­di­tions re­main­ing ex­tremely dif­fi­cult. “Our mar­kets con­tinue to defy nor­mal sea­sonal trends, with pre­vi­ous pos­i­tive sig­nals be­ing brief and not sus­tain­ing,” Wel­lard man­ag­ing director Mauro Balzarini said.

Wel­lard said ex­ports of feeder and slaugh­ter cat­tle across the in­dus­try were sig­nif­i­cantly lower.

Wel­lard ex­pects that its trad­ing loss in the sec­ond half of the fi­nan­cial year will be sig­nif­i­cantly larger than its $ 16 mil­lion firsthalf loss. The to­tal loss for the full fi­nan­cial year will also be af­fected by as­set im­pair­ments and write­downs, and will not be fully known un­til late Au­gust 2017. Wel­lard shares dropped to an all­time low of 14.5c on the news be­fore re­cov­er­ing slightly to 15.5c.

That’s still down 4c, or 20.51 per cent.

Wel­lard said it was con­tin­u­ing to re­view op­er­a­tions and costs and had cut staff and over­heads in its do­mes­tic and over­seas op­er­a­tions.

The com­pany has im­proved its trad­ing terms with sup­pli­ers and is char­ter­ing ves­sels to third par­ties to help cover ves­sel costs and long pe­ri­ods of un­der- util­i­sa­tion.

Wel­lard has com­pleted the sale of its ship, the MV Ocean Out­back, which will re­turn about $ 17.6 mil­lion to the com­pany, and re­tire about $ 15.6 mil­lion in debt.

Wel­lard said there had been on­go­ing breaches of its bank­ing fa­cil­i­ties at June 30, 2017, but the com­pany was work­ing with its bankers on the pro­vi­sion of waivers.

PALATABLE OF­FER: Spot­less Group, which of­fers among other things, cater­ing ser­vices is now ma­jor­ity owned by Downer.

Newspapers in English

Newspapers from Australia

© PressReader. All rights reserved.