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AFFCO Interim Result

AFFCO Holdings Ltd (AFFCO) has reported an after tax profit of $752,000 for the half year to 31 March, 2001.

This result was based on operating revenues totalling $559 million for the period, while earnings before interest and taxation stood at $5.8 million. Return on average equity was 0.7%. Total equity increased by $1.2 million to $115 million, while total tangible assets improved by $124 million to $380 million.

AFFCO Executive Chairman Sam Lewis said it was disappointing to report a disruptive interim period for the company, and with it, a result significantly below expectations.

Mr Lewis said the interim half year surplus represented a slowing in the pace of the company's recovery towards acceptable returns for its shareholders.

"However, following the $15.1 million after tax profit for 1999/2000 year, it has also proved a timely catalyst to review and reappraise some of the company's activities in the light of shareholder calls for more tangible returns from the restructuring programme in place.

"The positive outcome is that the Board foresaw the situation and acted quickly to minimise its adverse consequences. As a result, the company is now facing the future resolutely and realistically, and with a real determination to bring structures, activities and costs into line with industry best practice."

"Already the effects of the strong internal focus on structures and costs have become apparent. A significantly revamped management team provides extensive meat industry experience, and a tighter reporting structure."

Mr Lewis said all new business proposals have been stringently reviewed, along with established projects with domestic and international emphasis. This review has resulted in the joint venture at the WuLiangYe AFFCO Golden Ox plant in Chengdu, China, suspending operations at the plant until livestock procurement issues have been resolved.

All of the company's other international initiatives will remain under close scrutiny to ensure they consistently meet performance targets, he added. ends 18 May 2001


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