LIVE export company Wellard reported a loss of US$5 million in the first half of the 2023 financial year.
The company said Australian cattle export volumes were at the lowest level in 10 years, a result of high cattle prices and disease outbreaks in Indonesia. The company also said the high cost of bunkers also contributed to its half-year loss.
The company’s revenue for the half year of US$22.8 million was slightly lower than that of the previous corresponding period, this was despite the fact that company’s vessel Ocean Ute was in drydock for 35 days for its special survey class renewal.
The company said it usually passes on bunker costs through the freight rates paid by its customers. However, this year, the company said this ability was compromised in the half because livestock importers and exporters were also suffering losses or tight margins.
Wellard’s EBITDA was positive for 1H 2022 at US%700,000, a significant decrease on its 1H 2022 EBITDA of US$6.3 million.
Wellard executive chairman John Klepec said while it was disappointing to break the company’s recent run of profits (the company was in the black US$500,000 in 1H 2022), the company would be able to weather the current trading conditions.
“Whilst cattle producers continued to enjoy high prices, the first half of FY 2023 was tough for the rest of the Australian live export supply chain – with the outbreaks of both lumpy skin disease and foot and mouth disease in Indonesia causing both a fall off in buying activity and a changed charter market dynamic towards smaller vessels in that market,” Mr Klepec said.
“Fortunately, the demand for breeding cattle from North Asia remained strong and VLSO prices have retracted from their historical highs, though they still remain relatively expensive when compared to prior years.”
