AUSTRALIA'S largest private landholder, Adelaide-based cattle producer, S.Kidman & Co, has been hit by poor rainfall and weak domestic cattle prices for the second year in a row.
The group had an after-tax loss of $1.4 million for the 2013-14 financial year, and the primary problem was the value of the Kidman cattle.
Kidman was forced to sell down its herd, by around 15 per cent to 182,000 head, during the year.
The sales were forced because of a second summer of low to zero rainfall in the Queensland channel country and northern South Australia.
They did help deliver positive net operating cash flow of $9.3 million. But with weak cattle prices, the sales were at prices less than book value and the value of the reduced herd was $12.3 million lower than the previous year.
Under accounting standards those numbers are offset against sales earnings. Kidman's chairman, John Crosby, said the significant upturn in cattle prices since the June balance date was at last starting to reflect the ongoing high demand and high international pricing for beef.Tough seasonal conditions
Cattle prices have risen around 15 per cent since June.
Mr Crosby said that the tough seasonal conditions had continued.
"Although the Kidman herd continues to be prudently sold down, at this point the prices for sale stock are much improved," he said.
Kidman and others are now watching prices in southern Australia where, after a dryer than normal winter, an above average number of cattle are already being turned off for sale.
The group's chief executive, Greg Campbell, noted a "fair bit of optimism".
"The international price for beef is very strong," he said. "If rain comes through it will pull up the flow of cattle to the meat works."
S.Kidman & Co has 17 properties, both pastoral leases and freehold, covering 110,000 square kilometres in South Australia, Queensland, West Australia and the Northern Territory.
The group did not change the valuation of its land or leases, and it did pay a dividend. The loss was also less than last year's $3.3 million.