AUSTRALIA-AGRICULTURAL GIANT IN TROUBLE.
There is speculation that an announcement is imminent that Futuris is selling its stake in the Australian Agricultural Company, with shares in both companies placed in a trading halt today.
Futuris, parent company of Elders, has been keen to reduce debt for some time, resulting in last year’s failed attempt to sell its 43pc stake in AACo. However, both companies have today asked to be placed in a trading halt until Wednesday pending the "announcement of a corporate action which is contingent upon the outcome of negotiations with a number of parties", according to AACo. "It is expected that the trading halt will end upon the lodgement of an announcement later today." Futuris today posted an after-tax loss of $329.9 million for the first half of the financial year, although this figure included $307.1m in non-recurring items as a result of "asset writedowns, divestments and restructuing". At the underlying level Futuris recorded a loss after tax of $22.1m for the six months to December 31, which compares to a profit of $32m in the corresponding period last year. Futuris chief executive Malcolm Jackman said the variance from a forecast loss of $9m for the six months was due to an accelerated deterioration in global economic conditions. "In December alone our Rural Services operations experienced a $9m loss from the collapse of fertiliser and agricultural chemical prices," Mr Jackman said. But he said changes to the Rural Services division have trimmed $30m per year from the company’s overheads. Elders Rural Services managing director, Mike Guerin, said the company’s challenging first half resulted in underlying earnings before interest and tax coming in at a loss of $2m. Mr Guerin said that although Elders Rural Services’ overall sales revenue was flat compared to the first half of the previous financial year, mainly driven by a soft property market, a tightening wool market and global conditions, strong performances had been recorded in the divisions of livestock and grain trading. "The Elders Toepfer Grain joint venture between Elders and international grain major Toepfer International is going from strength to strength," Mr Guerin said. "Our model, which provides growers with price certainty, payment security and global access, is working well in the new bulk wheat deregulated environment. "Contracted sales to January are already 49pc above our grain division’s sales for the full 2007-08 financial year result.
"We are well on target to achieve our full year forecast of three million tonnes.." Futuris Corporation has posted a $329 million first-half net loss and suspended dividend payments.
Analysts had been expecting the rural services and automotive company to report a $23m loss.The result includes $307m worth of non-recurring items, including write-downs of assets and losses on the sale of divested assets.Futuris says it is comfortable with market forecasts of a $39m to $45m underlying profit.
