Managing director of newly-floated livestock shipper Wellard, Mauro Balzarini, concedes the live exporter has “endured a tough start to its Australian Securities Exchange (ASX) life” having booked a disappointing pro-forma profit of $14.8 million after tax.
Mr Balzarini said Australia’s biggest live cattle exporter was well under its prospectus profit forecast of $46.4m for the year.
Since its public listing in December, Wellard has been caught by a sharp reduction in cattle supplies and record high cattle prices, plus costs associated with two vessel breakdowns and the late delivery of its new ship the Ocean Shearer.
Mr Balzarini said Ocean Shearer’s entry into service in April and the development of Wellard’s South American operations would help a return to better profits.
However, given the significant shortfall in profit expectations and continued “margin compression” caused by the cattle shortage Wellard directors have voted not to pay a dividend for 2015-16.
Wellard is also searching for two key management replacements after resignations this week of director, Sharon Warburton, and company secretary and general counsel, Yasmin Broughton.
The company achieved revenue of $573.8m in 2015-16 - down from its December forecast of $607.4m.
It’s pro-forma profit is still to be audited to include costs associated with the initial public offering on the ASX.
“We are now focussed managing the business through the current challenging livestock market landscape so that we are positioned to take advantage of the opportunities that will present themselves when livestock prices invariably return to their normal trading range,” Mr Balzarini said.
“Importantly, despite the tough trading conditions we still achieved a pro forma NPAT of $14.8 million.”
Mr Balzarini acknowledged the contributions of Ms Warburton and Ms Broughton to the company and wished them well in their future endeavours.
