A global revival in restaurant dining and the growing popularity of Australian Agricultural Company beef brands in North America, South Korea and Europe have propelled the cattle giant's statutory profit to $137 million - up about 200 per cent.
The big profit jump was achieved despite the 198-year-old pastoral and branded beef business actually selling less meat.
AACo's statutory net profit after tax for the full 2021-22 trading year was a $91.4m rise on the same time last year.
Although the quantity of beef sold fell 14pc, AACo's average meat sales price per kilogram jumped 21pc, aided by buoyant cattle market values.
Sale volumes remain constrained, particularly in Australia and Asia, because its herd is still in a rebuilding phase following big losses and destocking after floods and drought in the past four years.
Operating profit
Overall net profit was primarily driven by operating profit leaping 105pc to $49.9m, compared with $24.4m the previous year, and $129.6m in unrealised mark-to-market gains on livestock of $129.6m, up from gains of $64.4m the previous year.
"This result confirms the company's commitment to investing in our brands and properties can produce positive financial results even in a turbulent global operating environment," said managing director Hugh Killen.
North America saw a 56pc growth in branded meat sales revenue, with a 21pc increase in volume and a 35pc rise in AACo's average meat price per kilo in the region.
RELATED READING
Total operating cash flow for the financial year was $24.2m, up 32pc.
Higher cattle sales margins also contributed to the favourable operating profit result and the value of AACo's cattle herd increased by $198.8m.
In fact, improvements in AACo's pastoral property and herd values contributed to its net assets growing in value to $1.36 billion, meaning net tangible assets per share also jumped 30pc to be worth about $2.27.
AACo's share price was trading at $1.88 prior to its profit announcement, well up from its $1 a share lows when the global coronavirus lockdowns sent the restaurant and food service sector into a tailspin in mid-2020.
Valuations for the company's pastoral property and improvements grew 28pc to $254.5m.
Better brand awareness
Mr Killen noted the American market price and volume increases had been driven by increased brand awareness, strategic allocation of product and the easing of COVID-19 restrictions.
Growth in South Korea remained a focus, too, with better in-store branding helping its Darling Downs name retain a leading Wagyu market share in the premium retail space.
While Asia and Australia had lower sale volumes of about 15pc due to a continued strategy of diverting high value cuts to other key markets, the average price per kilogram grew 6pc and 7pc respectively.
Recovering food service opportunities also provided a catalyst for growth in Europe and the Middle East.
Volumes grew 18pc and meat price per kilo increased 23pc as customers began to dine out again.
"While the recovery of foodservice as COVID-19 restrictions ease has been an important enabler to our results, it also allowed us to realise the hard work implemented at the peak of the pandemic in improving our brand awareness and in market allocation," Mr Killen said.
The strong foodservice rebound after COVID restrictions was continuing in key target markets.
Geopolitical risk
He noted, however, global supply chains continued to be impacted by increased geopolitical risk, notably coronavirus in China and the disruptive trade and economic consequences of the Ukraine war.
"This, along with rising inflationary pressures, will impact the cost of key inputs across the beef supply chain," he said.
"AACo's disciplined focus on costs as well as strategic customer management, product allocation and growing brand awareness will help to manage through this uncertainty."
The company was also pushing ahead with five major commitments to a sustainability framework launched last November - a first of its kind for the Australian beef industry.
Key focus categories cover landscape carbon, natural capital, methane emissions reduction, animal health and welfare certification, and the Wylarah Institute, which will promote rapid adoption of innovative science and agricultural practices.
Start the day with all the big news in agriculture! Sign up below to receive our daily Farmonline newsletter.