The toll from the devastating north west Queensland floods has spread to ASX-listed businesses, with the market capitalisation of beef producer Australian Agricultural Company falling more than $78 million on Monday as investors reacted to news that four of its properties had been severely impacted by floodwaters.
AACo, which describes itself as Australia's oldest continuously operating company, confirmed that one vast station in the Queensland Gulf region was expected to suffer “extreme losses” of livestock.
AACo said four of its properties had been subject to “unprecedented levels of flooding not seen before in the Gulf region,” adding that the overall impact of the floods on the company’s fiscal 2019 earnings was expected to be material.
Shares in AACo slumped throughout the day to close down 12.3 per cent (13 cents) at 93 cents.
Incitec Pivot also updated the market on the flood impact, revealing that the rail closure between Townsville and its Phosphate Hill facility would hit earnings.
Incitec Pivot’s Phosphate Hill facility produces phosphate fertilisers which are transported by rail to Townsville, from where they are then sent elsewhere in Australia or overseas. Phosphate Hill is about 250 kilometres south of Mt Isa.
The company said it had started a progressive shut down of plants at Phosphate Hill over the weekend, and would continue to "run each plant for as long as possible given storage and input constraints".
The extent of the damage to farms caused by the monsoonal rain that hit north west Queensland is mind boggling. Queensland Premier Annastacia Palaszcuk said recently she had seen “a sea of dead cattle” as she toured devastated areas, while some estimates of the losses have been put at a minimum of 300,000 head.
Wondoola Station, about 300 kilometres north of Mt Isa, is the worst affected of the four AACo properties. It has a herd of about 30,000 mainly cows and calves, and AACo warned that the property is expected to incur “extreme losses” of livestock.
AACo said its other stations severely impacted by the floods were Canobie, Dalgonally and Carrum.
“Current conditions are still challenging and a credible assessment of the impact on livestock and infrastructure will only be possible once the flood waters have started to recede," AAco said.
The company does not believe the flooding will affect its ability to fulfil its supply obligations, or the continued rollout of its branded beef strategy.
While the Queensland Gulf country is experiencing severe flooding, AACo said south western Queensland and the Barkly region of the Northern Territory, where most of its properties are located, are continuing to receive below average rainfall and extreme heat.
"As flagged in the company’s half-year results, the seasonal conditions will significantly increase station operating expenses, particularly grain, feeding and transport costs," it said.