AA Co’s Livingstone beef processing plant (Northern Territory) has closed with the blame being put on high cattle prices and input costs. The total statutory net loss after tax was $102.6 million for the financial year where there was a one off write down of $74.9 million for the business itself. The aim of the closure is to streamline the company’s supply chain and will shift the focus to it’s high quality beef brands.

CEO, Hugh Killen, has told the market that the plant was in a very challenging environment throughout the Northern Territory with higher cattle prices than the southern counterparts and most input costs are higher as well. The demand was still there for its product but the inputs were too dear to make a viable profit. The company will retain it’s options and just because the plant is not profitable today, doesn’t mean it wont be in the future with different partners.

At the moment, the plant is not being offered for sale. Mr Killen has invited credible offers which may or may not be considered but the decision will be based on the best possible return for AA Co’s shareholders. It was mentioned that circa 20% of the cattle processed through the Livingstone plant was from AA Co’s own northern cattle properties.

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