AUSTRALIAN Agricultural Company (ASX: AAC) has posted half yearly results showing a $14.1 million net loss after tax for the period until September 30.
The result announced on Wednesday included the absorpsion of $36m in drought related costs for the period and, significantly, an 80 per cent reduction in the $68.4m net loss recorded for the same period last year.
An upbeat AA Co chief executive officer Hugh Killen says an almost 10pc growth in global Wagyu meat sales led by its Westholme brand demonstrated that important progress is being made in the company's global branded beef strategy.
Mr Killen said the company had now delivered positive operating cash flows in three out of the last four half-year periods.
"Our ambition to grow our premium brands and pursue our strategy as a branded food business has accelerated in the last six months, with encouraging results," Mr Killen said.
"We're seeing improvements across the business, culminating in our strongest half yearly Wagyu meat sales and strong growth across key regions."
Mr Killen said AA Co had increased sales across Asia by about 8pc, Europe and the Middle East by about 26pc and North America by 7pc.
"AA Co carried out seven launches of premium brand Westholme over the last six months, including London, Hong Kong, Los Angeles and Chicago," he said.
"We've also upgraded our distributor partnerships in the UK, Europe and the US while embedding sales and marketing teams across key markets in Europe, Asia and the US.
"The feedback from chefs and diners has been tremendous. Our targeted engagement with them, both directly and through our distributors, has helped form strong new partnerships and significant potential for future growth."
Mr Killen said the half yearly result reflected the impact of tough, ongoing seasonal conditions.
"We absorbed around $36m in drought related expenses in the first half, with increased costs of production, including feed and transport," he said.
"That is about $11 million more than the same period last year, which shows how tough conditions are across the country.
"Our strategic focus on delivering the best possible product and consistency for our customers has seen us continuing to invest in our herd and assets.
"AACo's ability to produce quality, without interrupting supply around the world is one of the things that sets us apart."
Mr Killen said markets were being driven by people across the world looking for sustainable and safe sources of protein.
"We are identifying new opportunities and have created the right foundations for ongoing growth in existing markets," he said.
"AA Co has an unparalleled provenance. We have built one of the largest Wagyu herds in the world with industry leading quality and genetics.
"AA Co continues to present a unique value proposition as the only company in the world able to produce the finest quality beef at scale.
"There is still much room for progress, but the results over the last six months should give our shareholders, our community and our industry confidence that AA Co's strategy is the right one and we are heading in the right direction."
The story AA Co says increased Wagyu sales herald positive future first appeared on Queensland Country Life.