AACo continues to mothball Livingstone abattoir at Darwin

AACo-logoPROSPECTS for shareholder dividends, the future of the company’s mothballed Livingstone Beef abattoir near Darwin, and risk of cattle theft were among questions put to the Australian Agricultural Co board during the 2021 annual general meeting.

Question time is usually fertile ground for gauging shareholder sentiment about the world’s largest beef producer’s financial performance and management actions, but the fact the AGM was held online again this year apparently limited this.

The recent sharp improvement in AA Co’s ASX stock value may also have contributed.

Just four questions were fielded from shareholders this year – perhaps a record low since the company first went public 20 years ago, in 2001.

Shareholder Robert Burrows asked what the future held for AA Co’s mothballed Livingstone Beef abattoir near Darwin.

AA Co suspended operations at Livingstone following dramatic operating losses just 15 months after the plant was built, at a cost exceeding $100 million. AA Co’s board went against overwhelming industry opinion in deciding to go ahead with the plant’s construction in 2017.

Managing director Hugh Killen said AA Co continued to believe that there was “important strategic value” in its Livingstone processing asset.

“But in the current environment where we see cattle herd numbers at 36 year lows, and processor losses at ‘$300 to $400 per animal,’ it would not be the right environment to be restarting the Livingstone plant,” he said.

“Additionally, there is significant shipping stress going on globally at the moment, related to COVID, which would make a start-up of the plant imprudent, under the current conditions. But we continue to assess market conditions regularly.

The plant is maintained in a condition that means that should we wish to start it up again, we can do so,” Mr Killen said.
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