Wellard hopes for better year after selling feedlots, abattoir and livestock carrier

A promising start to the new financial year has live animal shipping operator Wellard hopeful its woes are behind it.

Wellard has sold the MV Ocean Swagman to Heytesbury Holdings for $31.5 million.

LIVE animal shipping operator Wellard Limited is hoping the company has turned the corner after offloading non-core businesses and shutting down its livestock export operation.

Executive chairman John Klepec told last week’s annual general meeting the first five months of this financial year were a vast improvement to last year’s disaster.

Mr Klepec said three of Wellard’s four livestock carriers had been fully utilised since July 1 and the fourth, the MV Ocean Shearer, had now made two trips to Turkey once that country had reopened its market after shutting it in December last year.

“Whether those utilisation levels will continue is uncertain as the market is reluctant to buy forward with expectations of sufficient supply being available,” he said.

Mr Klepec said one risk to its business was rising prices of sheep and cattle in Australia pricing themselves out of the export market, impacting on vessel charters.

“It is our view that export sheep and cattle prices in Australia are close to being ‘fully priced’ in that if they go too much higher, then livestock importers and exporters of Australian livestock will struggle to compete with competing supply and proteins, which will impact on the vessel charter market,” he said.

Wellard was forced to sell its abattoir, feed mill, feedlots and pre-export quarantine facility in Victoria in the past year to reduce its debt and costs.

It also opted to exit the livestock trading business, shed staff and disposed of the Ocean Shearer under a sale and leaseback deal.

Wellard posted a net loss after tax of $48.4 million in 2018-19.

“This was clearly a disappointing result, particularly after our strong first six months,” Mr Klepec said.