A FOCUS on supply chains has helped cattle giant AACo record a big lift in its first-half earnings announced today.
AACo has reported a $19 million increase in operating EBITDA (earnings before interest, tax, depreciation and amortisation) to $11m for the six months to September 30, 2015.
The company also reported a $97m increase in statutory EBITDA to $92m and a statutory net profit after tax (NPAT) of $50m, a $64m improvement on the previous corresponding period.
It recorded an 89.5 per cent increase in beef sales for the half to $218m, underpinned by increased prices and the ongoing shift in volume from live cattle to boxed beef.
Total meat sales volumes were up 90pc on the previous corresponding period.
Higher live cattle prices also drove a 28pc increase in live cattle sales to $36m.
In a statement, AACo managing director Jason Strong said the result confirmed the company's strategy.
"Our traditional pastoral business has performed as you would expect in a rising cattle market but I'm really pleased with the performance of the group as a whole," he said.
AACo's net operating cash flow was up $52m due to the increase in operating EBITDA and a $28m reduction in working capital as the company increased the internal supply of cattle.
Mr Strong said the operating result was directly attributable to the focus on selling the highest quality beef in each of the supply chains in which the company operates.
"We are selling more kilograms, off the same herd base, for more money," he said.
"While we continue to build our branded beef business we are also continuing to invest in the fundamentals that are so important to a robust supply chain.
"Sales of boxed beef increased by $103 million half-on-half and now account for almost 85 per cent of total revenue."
The company also reported increased throughput at the Livingstone Beef abattoir at Darwin, with Northern Beef comprising 16pc of group meat sales revenue for the first half.
