The Australian Agricultural Company Ltd (ASX: AAC) share price is up almost 6% in late afternoon trading.
This comes after the company reported some positive figures for its first half results for the 2021 financial year.
Toady’s gains see the stock trading for $1.22 per share, up 9.5% year-to-date.
By comparison the All Ordinaries Index (ASX: XAO) is down 1.2% so far in 2020.
What does Australian Agricultural Company do?
Australian Agricultural Company is the largest integrated cattle producer in Australia. The company owns approximately 6.4 million hectares of farms, feedlots and processing plants across Queensland and the Northern Territory. That’s almost 1% of Australia’s total land mass.
Australian Agricultural Company sells its grass fed and Wagyu beef to both the domestic and export markets. Established in 1824, it claims the honour of being Australia’s oldest continuously operating company. Shares began trading on the ASX in 2001.
What did Australian Agricultural Company report to send its share price higher?
In its first half FY21 report, released this morning, Australian Agricultural Company reported it had delivered positive operating profit of $23.5 million as well as positive operating cash flow of $22.3 million. The company noted this came despite the “uncertainty and impact of COVID-19”.
Its average meat sales price increased by 14.5%, and statutory earnings before interest, tax depreciation and amortisation (EBITDA) profit improved by $18.4 million from the previous corresponding period (pcp) to reach $15 million.
Overall revenue was still down 21% from the pcp due to lower cattle sales and company brandings, which the company said is in line with impacts to Australia’s national cattle herd.
Highlighting the difficult operating conditions amid the global coronavirus pandemic, Australian Agricultural Company’s CEO said:
The full force of COVID-19 hit the restaurant sector right as we began our financial year, with our 16 food service markets severely impacted in a matter of weeks. To overcome the initial challenges and post a positive half is a notable achievement.
However, while this interim result is commendable, we are mindful there are many challenges still to come and a number of complexities to work through over the next 6 months…
Many restaurants remain closed or are having to adapt to reduced volumes and it will likely be some time before we see the food service sector return to normal.
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