Thank you for standing by. Welcome to the Australian Agricultural Company Limited FY 2024 Full-Year Results Release. All participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. If you wish to ask a question via the phones, you will need to press the star key followed by the number one on your telephone keypad. If you wish to ask a question via the webcast, please enter it into the Ask- a- Question box and click Submit. I would now like to hand the conference over to Mr. David Harris, Managing Director and Chief Executive Officer. Please go ahead.
Good morning and welcome to the Australian Agricultural Company's year-end financial presentation for 2024. I'm Dave Harris, Managing Director and CEO of AACo, and joining me on the call today is Glen Steedman, our Chief Financial Officer. I begin by acknowledging the traditional custodians of the various lands on which we meet today. In Brisbane, that's the Jagera and Turrbal peoples. I also pay my respect to their elders past, present, and emerging, and extend that respect to any First Nations people joining us for today's presentation. I will start our presentation this morning by running through a few of our key achievements of the company's performance. We will then take a closer look at how we have delivered on our priorities during the year, including our progress in sustainability and how our brands are performing in our key global markets.
I will then hand over to Glen to take us through the financials in more detail, after which I will finish with an update on our current operating environment as we move into financial year 2025. With that, let's begin our presentation on slide slide. We believe this is a strong result for FY 2024 in the context of difficult global conditions throughout the year, including increased global beef supply and reduced live cattle market prices. While these difficult conditions had some impact on these results, the company's strategy and unique distribution network helped deliver a strong outcome. Our brands are still commanding price premiums in market, and considerable work was undertaken to capture more value through our branded beef program. Our ability to increase sales volumes whilst achieving price resilience shows the strength of our supply chain.
We look forward to building on this success as we begin our 200th year of operation. The details of our performance can be found on slide six. AACo posted a AUD 50.5 million operating profit for FY 2024, built on the quality of the integrated supply chain and the momentum of our commercial brands in market. Although this result is 25% down versus the prior year, it is AACo's second-largest operating profit and the second consecutive year that the company has posted a full-year operating profit above AUD 50 million, demonstrating the ability of AACo's strategy to combat global market conditions. The operating cash flow was down on prior year as we continued to align spending with strategic priorities, including the Goonoo property expansion, which we will talk to more about shortly. The expansion was part of a AUD 36.5 million business investment program, which was AUD 16 million more than the prior period.
Pleasingly, the herd also grew 5% to 455,000 head of cattle. This demonstrates a conscious and intentional effort to invest in our company's future. As we indicated in November's interim results, cattle prices hit four-year lows in the period, which was the primary influence behind a weaker statutory performance. We are required to report the value of our herd, which feeds directly into the statutory numbers. However, the reduced cattle prices are primarily realized through limited live sales. While the significant reduction in cattle prices impacts our balance sheet and statutory performance, it has a more limited impact on our operating performance. The herd valuation adjusted down AUD 149.4 million, leading to a statutory net loss after tax of AUD 94.6 million. You can see while cattle prices and the statutory result are down, our operating profit remains positive.
Net assets are down marginally on the prior year to AUD 1.52 billion, with an AUD 78 million increase in pastoral property and improvements being offset by the reduction in herd value. This has led to a 3% reduction in net tangible assets to AUD 2.51 per share. Turning now to slide seven and delivering against our key initiatives for FY 2024. The strength of the supply chain that I mentioned earlier is further demonstrated by a 10% increase in Wagyu meat sales revenue. Some of that can be attributed to new product trials, including Wagyu bacon, burgers, and grass-fed products that we began to sell during the period and were met with positive feedback. AACo also relaunched the brand 1824 after a period of strategic development. 1824 honors the company's history and the year we were formed two centuries ago.
So it's fitting to have it relaunched now in our 200th year of operation. The brand will focus on maximizing revenue through new distribution channels outside of our brand's Westholme and Darling Downs. There was also considerable brand development work undertaken with the Westholme to position it for further opportunities in FY 2025. Under our sustainability initiatives, AACo signed up as a tier one partner in the Zero Net Emissions Agriculture Cooperative Research Centre during the period, Australia's largest ever CRC. The 10-year investment will accelerate our sustainability work and efforts to reduce our emissions. We also participated in another year of the Beef Cattle Herd Management Program. The efforts to make AACo a great place to work were further demonstrated by an 8% uplift in the employee engagement score in FY 2024.
We also executed our employee value proposition, which highlights the extraordinary nature of working at AACo and increased the number of women in leadership by 6%, including reaching equal gender representation among our senior leaders. The company transitioned to a new processor in FY 2024 as part of our drive to become a more efficient business. An increase in cost of production per live weight kilo can be largely attributed to the changing herd profile and more Wagyu animals that have a longer life cycle with more days on feed. The changing herd profile will help us take maximum advantage of the Goonoo property expansion that we reported at the half-year as we develop our assets. The expansion increased intensive supply chain capacity by 12% in the period and will boost supply into our global markets.
Further improvements totaling more than AUD 36 million were made across the operational side of the business, including upgrading buildings and other property infrastructure. Our solar bore transition is nearly complete. Now to slide eight and more information about progress in our sustainability program. In addition to our commitment to the Zero Net Emissions Agriculture Cooperative Research Centre, AACo has continued to make significant and innovative advances in a range of areas. One of those is a unique analysis of the way that carbon moves through our supply chain, which will help us identify the best opportunities for action to reduce emissions. That program of work has also helped inform our emissions accounting and will allow us to become even more sophisticated in our understanding of our Scope 1, 2, and 3 emissions.
This will be necessary as we prepare for the introduction of the government's mandatory emissions reporting requirements, which will come into effect in FY 2025 and eventually require us to report all emissions. We have delivered the first phase of the Rangelands Carbon by Satellite project. This will facilitate testing of a product that we anticipate will eventually allow us to measure landscape carbon at scale. We are continuing the development of our Accounting for Nature framework that will allow us to measure our natural capital. And we have progressed further work into methane-reducing feed additives, including looking at how we deliver them into our vast rangelands and completing our world-first Asparagopsis trial in long-fed cattle. I'll now take you through some of our commercial performance by region as we turn to slide 10. The distribution of our branded Wagyu shifted in FY 2024.
This slide shows how we use the strategic allocation of product to respond to evolving market conditions. By using our strong distribution network and the mature relationships with our partners and customers, we are able to place the right cuts in the right markets at the right time. Managing supply while also considering broader market conditions allows us to create price tension with the aim of achieving the best possible price across all markets. We consider markets individually as well as part of an interconnected network, with each market playing a role to realize short-term outcomes while also staying well-placed to deliver the full potential from our brands in the future. You can see how this is broken down as we look at the performance across each of our key markets starting on slide 11.
AACo was able to achieve coveted menu placements in North America and price growth across ultra-premium product offerings, demonstrating continued progress in the region despite the challenging market dynamics. The ongoing herd liquidation, which has increased overall beef supply along with inflationary pressures and growing competition from Wagyu producers, impacted overall performance. Highly marbled Wagyu, such as cuts from our brand Westholme, remain a premium choice for diners and sit above local offerings in terms of quality. Westholme is in demand as a consequence, and chefs use it to create remarkable dining experiences. However, because of the added competition and other market dynamics during the period, it was necessary to manage supply to the region. The strength of our distribution relationships and global network enabled us to provide the best response to market challenges.
Our commercial team in North America continues to create unique experiences with activities growing Westholme brand awareness and supporting established and new relationships. This continues to resonate in this market and positions us well for the future as we grow our geographical diversity of distribution in the region. Moving to Asia on slide 12. Pleasingly, we achieved strong price growth while also increasing the volume of branded beef. This led to an increase in overall sales value in the region. Launching a premium tier with our brand Darling Downs in Korea helped recapture market share despite the increased supply of local beef. We expanded our food service presence and increased Westholme branded sales, supported by additional investment in marketing activities, product activations, and digital engagement. Expanding our presence through new partnerships in Indonesia and Thailand also helped drive growth in this region.
Asia remains our biggest region by volume and revenue. It's also an important region for helping maintain overall global price tension. Moving now to Australia on slide 13. As well as continued investment in Westholme, AACo reintroduced the 1824 brand and expanded Darling Downs in Australia this period through establishing new distribution partnerships. That contributed to a boost in volume, which, when combined with broader increased supply, impacted prices in this region. As our spiritual home, Australia remains an important buffer to help manage global prices and broader market dynamics. It has a key role in our strategic approach to market allocation as we are able to increase supply of specific products to our customers here in order to optimize price and support growth in other key regions. The 1824 brand will allow us to extract more value as we continue doing this going forward.
Noting Australia makes up just 10% of our global meat sales, small variations in volume and price can appear bigger when looking at them in percentage terms. With this in mind, it was pleasing to see the limited impact on price despite the volume increases, which is testament to the hard work and strong partnerships developed by our commercial teams. Turning now to slide 14. AACo took an intentional strategic approach to Europe and the Middle East during this period. As a high-paying market, it remains highly competitive. And so we were selective in our distribution and managed volumes to maintain price. We've spoken to you previously about our desire for strategic expansion in this region, but we will get the best long-term outcomes by managing the pace of our growth.
We also used the period to strengthen partnerships and test key product innovation, particularly in the Middle East, including the Wagyu bacon and burgers. We're encouraged by the results of these trials and by our overall performance as our teams navigated the global operating environment and market dynamics. Turning now to slide 15. As a vertically integrated business, our beef strategy includes both premium products sold under our brands as well as other beef products across the rest of the carcass. This other beef is mostly sold without a brand and includes things like trim, secondary cuts, and more commoditized. As such, these unbranded meat sales are more heavily impacted by the global supply and demand dynamics such as the USA herd liquidation. Other meat sales contribute up to 50% of our total sales value.
With our current programs, including Westholme and Darling Downs performing well and demonstrating the effectiveness of selling under brand, AACo sees an opportunity to extract further value from products across the whole of the carcass by selling more of them in this way. The introduction of 1824 as well as new product lines will enable us to realize some of this opportunity. New offerings from this category were sold late in FY 2024. I'll now hand over to Glen, who will take you through our financial performance in more detail.
Thank you, Dave, and good morning, everyone. It's a pleasure to be with you today to take you through our FY 2024 year-end results. AACo has continued our focus on branded beef and delivered a strong performance for FY 2024. Total revenue of AUD 336.1 million is up 7%, making this the third consecutive comparable period of revenue growth.
We've achieved an operating profit of AUD 50.5 million. While operating profit is down on the prior period, this is AACo's second largest operating profit delivered in challenging market conditions experienced throughout the year. Operating cash flow of AUD 9.3 million is down AUD 6.7 million on the prior year, with the increased cost of debt impacting performance due to interest rate rises and drawdowns to fund investment initiatives, including the Goonoo expansion. Average Wagyu meat sales price performance was impacted by market dynamics for global meat. However, our branded meat sales were able to materially hold price during the period, with other meat sales being impacted by challenging dynamics and macroeconomic headwinds. Net Tangible Assets of AUD 2.51 per share reflects our strong asset base despite the reduction in cattle values over the period, which also impacted our statutory profit performance. Turning to revenue on slide 18.
Our revenue performance in FY24 is a key achievement for the year. We're able to leverage our existing supply chain, responding in an agile manner to the challenging price dynamics to increase supply and combat these negative price impacts. As Dave mentioned earlier, the resilience of our branded beef products limits the impact of price pressure, with volumes up 24% and the average price down 11%. Cattle sales are subject to live cattle markets, which reached four-year lows during the period and had a direct impact on cattle sales margins. Again, we were able to increase volumes by 49% to combat these market conditions. Turning now to slide 19, profit and loss summary. The significant decline in the cattle market prices impacted our statutory results.
The reduction in statutory EBITDA of AUD 137 million was driven by unrealized mark-to-market loss on the herd as well as a lower fair value on animals, which were sold or processed. This was in line with broader market conditions and resulted in a net loss after tax of AUD 94.6 million. As Dave indicated earlier, our strategy of selling premium beef into global markets helped us limit the impact on our results from reductions in live cattle prices. This is why we focus primarily on operating performance. Resilience in sales performance helped produce a pleasing operating profit of AUD 50.5 million. This was driven by improved meat sales revenue with 24% higher sales volume. Cattle sales revenues are materially in line with the prior year, with the reduction in market prices offset by higher volumes. We continue to have a disciplined focus on controlling costs.
While Cost of Goods Sold were higher than the prior period, this was driven by the increased meat and cattle sales volumes, with the average cost per kilogram down versus the prior period. Now turning to our cash flow on slide 20. Being able to increase volumes while controlling costs enables us to achieve a positive operating cash flow. Our overall operating cash inflow is down on the comparable period in line with the increased financing costs. The business invested in initiatives outside of normal business activities on projects we expect to realize future benefits. This included the Goonoo property expansion, which, as Dave said earlier, has increased capacity by 12%. The AUD 36.5 million investment on our assets in the business during the period has benefits now and into the future, including saving costs, improving safety, quality, and efficiency, overall generating a better experience for all of our employees.
Turning to slide 21, our balance sheet summary. Notwithstanding the unrealised reduction in herd value, our asset base remains strong, with total assets only marginally down on the prior year. Our livestock herd numbers have grown 5% from FY 2023, with continual optimization of our herd to meet future strategic growth. The livestock fair value adjustments are the main cause of the decrease in NTA, down 3% to AUD 2.51 per share. The impact of our cattle fair value adjustments was partially offset by growth in our pastoral property values, with a AUD 78.1 million increase driven by investment and market value increases. Our pastoral assets are recognized as being among the best in the world. Our gearing ratio of 23.7% is at the lower end of our target range of 20%-35%.
We have AUD 600 million in total committed borrowing capacity, with AUD 186 million unutilized and significant headroom under our existing covenants. Our results demonstrate the strength and resilience of our business, with our branded beef strategy driving positive outcomes despite tougher market conditions. Our assets are of a quality and scale to enable us to adapt, and we intend to develop these as we continue to unlock further value. I'm proud of our dedicated teams across the globe who work hard together to achieve our goals. I'll now hand back to Dave to take you through our operating environment and closing remarks.
Thanks, Glen. Now let's move to slide 23 and our operating environment. We've talked at different points through this presentation about the varying market dynamics, most of which remain outside of our control. Global meat sales conditions remain uncertain for FY 2025. However, a key feature of this period has been how we have purposefully positioned ourselves to both manage the current conditions as well as prepare for the opportunities that we anticipate will come while still achieving a positive financial performance. Managing the things that are within our control will keep us in a strong and agile position, able to respond in the best fashion as required. Consecutive favorable seasons across AACo properties are contributing to strong pasture growth and increased productivity. Combined with a full year of benefit being realized from the Goonoo property expansion, we anticipate healthier cattle and increased supply of our premium Wagyu.
We will continue to drive efficiencies throughout the year without compromising on quality and should benefit from reducing inflation, albeit with higher baseline input costs than the same time last year. Analysts predict global oversupply of beef will ease in late FY 2025, which, if realized, should alleviate pricing pressures across our Wagyu boxed beef and live cattle sales. Finally, AACo commenced a review of its strategic direction in FY 2024, and we look forward to sharing more with you in due course. While we remain focused on improving earnings from the sale of premium branded beef and live cattle, the strategy development is considering alternative areas for value generation, which include utilizing our vast land holdings to unlock more value and further sustainability initiatives. We appreciate you joining us for today's presentation and trust that you recognize the progress we have made this year. Thank you for your support.
Thank you to the entire AACo team here in Australia and around the world for helping deliver this performance in FY 2024. We will continue working together to honor our past, respect our present, and innovate for our future. That is the end of the presentation. We're now happy to take questions.
Thank you. If you wish to ask a question via the phones, you will need to press the star key followed by the number one on your telephone keypad. If you wish to ask a question via the webcast, please type your question into the ask-a-question box. Your first webcast question comes from Eric Lowe with ELOC & Associates. What is AACo's forecast of Wagyu price in the USA as they are in the rebuilding of stock after destocking induced by prolonged drought?
Yeah, thanks for the question. Like I said there in a later part of the presentation, most analysts are predicting that those general beef prices will certainly improve in the back half of 2025. I think we are seeing that probably start a little bit more in the kind of commoditised, lean area of production. And so at this point in time, we probably feel that the Wagyu and that really premium part of beef will be a little bit of a lag on what the analysts think. But largely, we obviously see it as a lot of opportunity, but probably back end of next financial year for us.
Thank you. Once again, if you wish to ask a question via the webcast, please type it into your ask-a-question box and click submit. We will just pause momentarily for any further questions to filter through. There are no further questions at this time. It does conclude our conference for today. Thank you for participating. You may now disconnect.