Australian animal feed maker and salt producer Ridley Corporation Ltd has returned to profit in its first half, overcoming a depressed dairy market, and upgraded its full year guidance.
The Melbourne-headquartered company this week delivered its first financial report without impairments or significant items in five years.
Ridley posted a net profit of AUS$14.9 million for the six months to December 31, compared to a loss of $50 million in the previous corresponding period that included a $52.2 million non-cash loss on the sale of its 69% stake in its Canadian subsidiary.
Ridley upgraded its full year guidance to a net profit of between $28 million and $30 million, from a previous guidance of $14 million for each half.
“We are not factoring in any favourable market movements for the second half,” managing director John Murray said.
“Instead, our confidence arises from our sector diversification, reduced impact of climatic conditions and the commencement of returns from our recent new contracts and profit-accretive capital projects.”
Ridley operates two business, Ridley Agriproducts and Cheetham Salt.
The agriproducts business reported earnings before interest and tax (EBIT) rose 33% on the previous corresponding period to AUS$13.7 million due to growth in the poultry and aquafeed sectors.
Earnings growth was achieved amid a 26% downturn in dairy-feed volumes due to falling dairy prices.
Cheetham Salt posted a 1% rise in EBIT to AUS$9.5 million, but Ridley said the company was delivering a more stable performance after completing a capital renewal program.
Murray said Ridley remained alert to acquisition opportunities within the agricultural products sector, but there were significant organic growth opportunities within the business.
A feasibility study into a potential residential development on Ridley's Dry Creek site in South Australia would be extended to June 30 to resolve 'a number of complex issues', the company said.