Elders Posts 67% EBIT Surge, Eyes Growth Amid Dry Conditions

Strong Financial Recovery

Elders Limited (ASX: ELD) has delivered a significant turnaround in its half-year results for the six months ending March 31, 2025. The agribusiness giant reported underlying earnings before interest and tax (EBIT) of $64.3 million, marking a 67% increase compared to the prior corresponding period. This improvement reflects a combination of higher livestock prices, strategic acquisitions, and disciplined cost management.

Sales revenue climbed to $1.413 billion, up 5% year-on-year, underscoring the company’s resilience despite ongoing challenges in parts of the country. The board declared an interim dividend of 18.0 cents per share, maintaining a 50% franking level, signaling confidence in the company’s cash flow and profitability.

Mixed Operational Performance Amid Weather Challenges

The livestock sector was a standout contributor, with agency services benefiting from increased prices and volumes for cattle and sheep, particularly in drier regions where de-stocking accelerated. Wool margins also improved due to better earnings per bale, although total bales sold declined as producers await a market recovery.

Conversely, the Retail Products division faced margin pressures, primarily due to dry conditions in South Australia and western Victoria. Crop protection sales and margins fell, impacted by lower demand and increased local competition. However, strong performances in fertiliser and animal health partially offset these declines.

Wholesale Products saw margin improvements driven by a favourable product mix, while Real Estate Services experienced significant growth, buoyed by the acquisition of IPST Holdings (formerly Knight Frank Tasmania) and organic expansion across residential and broadacre markets.

Strategic Initiatives and Outlook

Elders continues to invest in its Eight Point Plan, focusing on cost efficiency and capital discipline. The company’s recent investments in a modern feed mill have enhanced feed and processing margins through increased cattle throughput and operational efficiencies.

Looking ahead, Elders forecasts an average winter crop despite a late sowing start in some regions. The company anticipates that some crop input sales deferred in the first half may materialise in the second half due to widespread dry sowing. Livestock market fundamentals remain strong, with potential for price increases if supply tightens following first-half de-stocking.

Additionally, the regional residential property market outlook is positive, supported by potential interest rate reductions and the expanded Elders Finance brokerage model. However, investors await the Australian Competition and Consumer Commission’s decision on Elders’ proposed acquisition of Delta Agribusiness, expected on May 29, 2025, which could influence future growth trajectories.

Safety and Sustainability Focus

Elders reported improvements in workplace safety, with a reduction in the Total Recordable Injuries Frequency Rate from 9.8 to 6.0, reflecting ongoing commitment to employee wellbeing. The company also emphasizes sustainable initiatives aimed at future-proofing Australian agriculture, including carbon farming consultancy and digital service expansions.