61ed7578-cbbc-42d1-952d-042e32618dd9.pdf


Table of Contents‌‌

H1 FY16 IN REVIEW 2

CONSOLIDATED RESULTS 3

SEGMENT REVIEW 8

GRAINFED 8

GRASSFED 10

NORTHERN BEEF 11

CORPORATE 12

OTHER MATTERS 13


For further information please contact:‌


Investor Enquiries: Scott Prebble, Group Financial Controller

Tel: +61 7 3368 4420

Mob: +61 439 491 850


Media Enquiries: Matthew Horan, Horan Communications

Mob: +61 403 934 958


H1 FY16 IN REVIEW

Financial Headlines


($m)

H1 FY16

H1 FY15

Variance - $

Variance - %

Revenue from Ordinary Activities

258

151

107

71%

Gross Margin - Operating

64

38

26

68%

EBITDA - Operating

11

(8)

19

238%

EBITDA Margin - Operating (%)

4%

(5%)

-

9ppt 1

Adjustments:

Unrealised profits resulting from market valuation of livestock inventory2


81


3


78


2600%

EBITDA - Statutory

92

(5)

97

1940%

NPAT - Statutory

50

(14)

64

457%

Net Operating Cash flow

(3)

(55)

52

95%

Total Assets

1,302

1,131

171

15%

Gearing (%)

32%

31%

-

1ppt

Net tangible assets per share ($)

1.53

1.37

0.16

12%

People (FTE)

587

481

106

22%

Lost time injury frequency rate (LTIFR)

34

59

(25)

(42%)


Highlights in 1H FY16

  • Operating EBITDA increased by $19m from ($8m) in H1FY15 to $11m largely due to increased meat sales, greater levels of internal cattle supply moving between the Grainfed and Grassfed divisions resulting in a reduction in exposure to externally purchased feeder cattle, and higher prices received for live cattle sales.

  • Total Sales were up 71% on the Prior Corresponding Period ('PCP'), principally attributable to additional meat and by-product sales of $69m through the Grainfed division and $36m through the Northern Beef division.

  • Net Operating Cash Flow was up $52m due to:

    • Increase in Operating EBITDA of $19m

    • Reduction of $39m in spend on working capital from the PCP as external purchasing of feeder cattle was reduced and replaced with internal supply.

  • Increased throughput at the Livingstone Beef facility, with Northern Beef comprising 16% of group meat and by-product sales

    revenue for H1 FY16

  • Improved bank terms secured with AACo's lenders will provide greater flexibility and reduce the cost of funding.

  • Lost time injury frequency rate has decreased reflecting AACo's continuing focus on improving safety. The number of injuries recorded has decreased despite a significant increase in man-hours worked due to the operation of Livingstone Beef throughout H1 FY16.


    Dividends

  • No dividends payable for the period ended 30 September 2015.



1 Percentage points

2 Operating EBITDA assumes all balance sheet inventory movements occur as a pre-defined standard price, in contrast to Statutory EBITDA which recognises unrealised movements in inventory at market price. Refer to page 6 of the financial report for full definition.


CONSOLIDATED RESULTS

1. Half on Half Comparison Financial Summary

($m)

H1 FY16

H1 FY15

Variance

Meat Sales

218

115

103

Cattle Sales

36

28

8

Gross Operating Margin - Statutory

145

41

104

Operating Expenses

(47)

(48)

1

Livingstone Beef overheads

(7)

n/a

7

Corporate Marketing & Branding

0

(1)

1

R&D and Innovation

(1)

(0)

(1)

EBITDA

- Statutory

92

(5)

97

- Operating

11

(8)

19

EBIT

- Statutory

82

(11)

93

- Operating

1

(14)

15

Net finance costs

(11)

(8)

(3)

Income tax (expense)/benefit

(21)

5

(26)

NPAT

- Statutory

50

(14)

64


Other Operating Metrics3


H1 FY16

H1 FY15

Variance

Meat and by-product sales - mil kg CW

26

12

14

Cattle sales - mil kg LW

15

15

0

Meat and by-product sold - $/kg CW

8.47

9.63

(1.16)

Cattle sales - $/kg LW

2.43

1.83

0.60

Kilograms live weight produced - mil kg LW

40

41

(1)

Cost of cattle production - $/kg LW

2.59

1.99

0.60

Livingstone throughput - mil kg LW

16

n/a

16


Operating EBITDA by Segment


($m)

H1 FY16

H1 FY15

Variance

Grainfed

3

5

(2)

Grassfed

17

0

17

Northern Beef

1

(3)

4

Corporate

(10)

(10)

0

Group

11

(8)

19


3 LW - Live animal weight, HSCW - Hot standard carcase weight, CW - Carton weight containing saleable boxed meat


Variance Analysis - H1 FY16 vs. H1 FY15

Operating EBITDA increased by $19m, from ($8m) to $11m. This is principally due to the positive impact of increased supply chain integration from Grassfed to Grainfed, and higher prices achieved for live cattle sales.

Meat sales revenue increased by 90% in H1 FY16 compared to H1 FY15, due to increased demand from established Grainfed Wagyu and Shortfed markets, as well as manufacturing beef markets supplied through the newly commissioned Livingstone Beef processing plant. In H1 FY16 Livingstone Beef contributed 16% of the Group's meat sales volumes. Average sales price per kg CW for the group fell by 12% as the introduction of Livingstone Beef manufacturing beef product into the sales mix diluted price increases in the Wagyu and Shortfed markets.

Cattle sales volumes were unchanged in H1 FY16, however revenue increased by $8m due to rising live cattle prices achieved in domestic and export markets.

Cattle cost of production increased 30% primarily due to additional transport and logistics costs associated with an increase in transfers of cattle from Grassfed into Grainfed.

Additional information on the $19m increase in operating EBITDA to $11m is below:

  • A net increase in Grassfed operating EBITDA of $17m due to higher internal transfer prices of cattle at market value and external sell prices, as well as general operating cost savings achieved during H1 FY16. Internal transfer revenue in Grassfed of $52m is offset on consolidation by internal purchasing charges within Grainfed and Northern Beef.

  • Corporate overhead savings of $1m made primarily due to reduced corporate employee expense.

distributed by