Australian Ag Co estimates damages, cattle loss from floods
11 March 2019, Written by Matt Ogg
Beef producer Australian Agricultural Company (ASX: AAC) will need to repair thousands of kilometres of boundary fences now that floods have receded in North Queensland, but the positive news is it appears cattle losses were lower than expected in some areas.
As a preliminary estimate drawing from on-the-ground surveys, minimum estimated survival rates are the lowest in Wondoola at 10-20 per cent while the group's largest herd - in Canobie - has the highest expected suvival rate at 60-70 per cent.
These two operations had similar head counts pre-flood and combined accounted for around 84 per cent of AACo's livestock.
Based on these estimates and those for Dalgonally and Carrum, in a worst case scenario total losses would equate to almost 53,000 cattle. However, that is unlikely as cattle fled floodwaters over great distances outside of defined property boundaries.
In the coming months a complete assessment of cattle numbers will take place, with AACo claiming additional surviving animals are likely to be identified as a result and will be transferred both on and off the company's properties.
The group has emphasised impacts on the current herd will not affect its ability to fulfil supply obligations or the rollout of its branded beef strategy, with all animals intended for AACo's premium branded beef supply chain already on feed.
Full assessments are needed across a total of 800,000 hectares of affected properties to determine the impact on infrastructure, but a preliminary estimate of the cost of repairing damage to property, plant, fencing, station and water infracture is in the range of $6-8 million.
"Today's update provides further clarification consistent to and within the scope of the preliminary estimates in our initial advice to the market. On-the-ground assessments remain ongoing and it will be some time before we have a complete evaluation of the full impact of the flooding event," says chief executive officer Hugh Killen.
Investors are taking the announcement positively and at 2:30pm AEDT the share price was up 1.52 per cent at $1.Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
Business News Australia
Author: Matt Ogg