Big let-down for AACL Holdings shareholders

WA-based agricultural investment and management firm AACL Holdings says it expects to make a loss of about $7.2 million for the 2012 financial year instead of the previously forecast $2.1 million net profit.

Just six weeks ago, AACL director Nathan Omodei told _ Countryman _ that although the company had posted a predicted pre-tax loss of $400,000 for the first half of 2012, that loss would be turned into profit once grain marketing was finalised.

Back then he reiterated the company was expected to achieve a budget profit of $2.1 million.

Last financial year the company posted a profit of just $140,000.

This week AACL said it was in confidential talks related to funding arrangements for the group and expected to announce the outcome of the talks shortly.

AACL said in statement to the Australian Securities Exchange that it was forecasting the loss "based on lower contracted estimated grain tonnage, information not previously made available to the board and appropriate changes to accounting policy".

AACL said that its previous profit forecast was based on the delivery of about 400,000 tonnes of grain anticipated to be contracted to AACL by farmers.

Just two months ago AACL was expecting about 200,000ha of farmland in both WA and the east coast to be contracted, but that figure is now just 170,000ha.

Mr Omodei said the company had also reduced yield expectations due to the dry start. He said there were a number of factors why growers had decided not to contract hectares to AACL this season.

"That includes the economic factors farming this year," Mr Omodei said.

"Some have given up leased land, or left the industry and others (didn't contract) because they could access funds through the bank.

"Some, particularly on the east coast, thought with substantial soil moisture there was less risk this year."

AACL now estimates contracted tonnage of between 275,000 and 300,000 tonnes.

This would result in a net loss of $1 million.

The forecast for the 2012 financial year was revised downwards by another $6.2 million as a result of a decline in investment funds that AACL traditionally sourced from agricultural management investment schemes (MIS).

"The decline in these MIS funds has resulted in AACL reassessing its accounting policy in relation to fee revenue attributable to the projects it manages," AACL said.

AACL shares were suspended from trading on Monday, pending Tuesday's announcement, and remain suspended.

AACL last traded at 2.2 cents.