Elders is forced to downgrade profit forecasts again after livestock and crop sales dip

This time the company wrote down its expected profits down by another $10 million to $30 million.

The forecast El Nino has received some of the blame.

Elders' share price tumbled at least 40 cents on the unexpected update, down from around $7 per share to around $6.60 today.

Back in May at its half-yearly update, Elders managing director and chief executive officer Mark Allison outlined a profit turnaround from 2022 but predicted a "big finish" to the financial year, which has not been experienced.

The company's board has now blamed "cautious customer sentiment" because of uncertain seasonal conditions in some farming regions.

Elders said the Bureau of Meteorology's long-range forecast for a warm and dry September to November period and risk of an El Nino declaration was a variable "outside its control".

The immediate impact seen by Elders has been lower than forecast rural products sales in recent weeks, especially in crop protection products.

Elders is also experiencing "further weakness in the prices of cattle and sheep with a lower than forecast offset from volumes traded".

As a result, shareholders have been told earnings before interest for the remainder of this financial year (to September 30) is now expected be between $165 million and $175 million, down from the previous guidance range of between $180 million and $200 million.

The board's release to the Australian Stock Exchange said this update follows a review of its July financial results and August trading.

"As indicated in our previous guidance, the updated range announced today continues to be subject to variables outside of Elders' control which have the potential to materially influence Elders' financial outcomes, or the timing of those financial outcomes."

The company said these included further changes in internationally traded livestock and fibre, unexpected and unforecast changes in commodity prices, unexpected and unforecast changes to seasonal conditions and severe weather events.

The board also raised the prospect of further "supply chain disruptions" from external events, including geopolitical events "and the outlook and prospect of the Australian farm sector generally".

In May, Elders also experienced a big share sell-off after reporting a decline in its half-yearly profit from the lofty heights of 2022.

Weakening crop input and livestock prices were factors that caused a decline of 38 per cent in earnings before interest and tax to $82.8 million, and the company's gross margin declining $20.7m.

The company said it was in stark contrast to the first half of 2022, which had been underpinned by firmer livestock prices, a strong real estate market and ahead-of-season client purchases of crop products in response to global supply chain uncertainty.

Elders managing director and chief executive officer Mark Allison said in May the half year financial results had been "satisfactory, given the market and seasonal conditions".

At that time, the company expected its 2023 earnings to be weighted towards the second half of the year, "a return to normality".

Also back then, Elders' share price was trading at at $8.30 and dipped to $7.26 after the investor briefing.

The price has steadily decreased in the past 12 months following five years of steady growth, with a slight uptick from September to November the only bright spot for shareholders.

Shares reached close to $15 in June last year, with May's price representing a 47pc decline from the same time last year.

Mr Allison - who joined Elders as a non-executive director in 2009 and served as chairman and executive chairman between July 2013 and April 2014 - was to have parted ways with the company this November but has since agreed to stay on.