Thank you for standing by, welcome to the Australian Agricultural Company Limited FY 23 full year results announcement. 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 1 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.
Thank you. Good morning, welcome to the Australian Agricultural Company's full year results presentation for the financial year 2023. My name is Dave Harris, Managing Director and CEO of AA Co. Joining me on the call today is Glenn Steadman, our Chief Financial Officer. I begin today 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 respects to the elders past, present, and emerging, and extend that respect to any First Nations people joining us for today's presentation. Before we get underway, I want to take a moment to acknowledge the devastating floods and stock losses that have hit parts of the pastoral community over the recent wet season.
Whilst our properties and cattle were spared, we're familiar with the harrowing impacts of flooding after facing the same conditions on our properties in 2019. It's been heartbreaking to witness, and we wish the best possible recovery to everyone who has been affected. I will start our presentation this morning by running through the key highlights of our company's performance. We will take a closer look at the strategy and how delivering against its pillars helped us produce these results in FY 2023. This will be followed by an update on the important work we are doing in sustainability. I'll then take you through our key markets and share more about our regional and brand progress. Following this, I'll hand over to Glenn, who will take us through the financials in more detail.
After which, I will finish with an update on the operating environment as we move into financial year FY 2024. Before I continue, I would like to remind you about our purpose. At AA Co, we are evolving together to benefit future generations. This is why we exist, it's what drives me as I lead the company each day. We take great pride in the people we develop, the culture we create, the land we nurture, the animals we care for, and the exceptional Wagyu we produce. It provides direction as we strive to deliver on our vision to be trusted globally as the producers of the finest quality Australian beef. We took more strides towards this vision and our purpose in FY 2023. I'll elaborate on some of those key achievements in the next part of the presentation.
Our results in FY 2023 are a credit to the teams of people who work, and in many cases, live across our supply chain. I'm pleased to report that we are seeing results of our efforts and are making really good progress against our strategy. We have lifted our margins with improved pricing, controlled costs in a high inflation environment, and achieved positive outcomes in our target metrics, while also delivering against each of our strategic pillars. Our operating profit of AUD 67.4 million is a 35% increase on the prior period and is an extremely strong full year outcome. It was supported by a renewed energy and focus on driving price across all markets as we deliver on the full potential from our brands. Our statutory net profit after tax is AUD 4.6 million.
This number is impacted by the reduced cattle prices because the accounting standard requires us to include unrealized gains or losses of our herd. It is not an indication of our operating performance. The Australian cattle market softened during the period, creating an unrealized loss and impacting our statutory figure by around AUD 112 million. Operating profit and operating cash flow give the most accurate representation of our performance each year. Our operating profit today is one of the strongest signs to date that our strategy is having success. The strategy is built around selling branded beef into global markets. It decouples our operation position from the fluctuations of the cattle market. This year, you can see that while cattle prices are falling, our operating profit remains strong. Our operating cash flow was also a positive AUD 16 million.
As I said at the half, a growing herd for the future needs to be invested in today. This cash flow reflects this investment as our herd grew 13% to almost 433,000 animals. That will naturally result in elevated operational costs as the cattle move through our supply chain. This figure was also influenced by more expensive inputs due to the global inflationary and supply chain pressures. Noting we've maintained a stable cost of production even in this high-cost environment. The NTA has grown 14% to AUD 2.59 per share, driven by significant increase in property values, taking our net assets to AUD 1.6 billion. I also feel we have made good progress on our sustainability initiatives. Turning now to slide six and the strategy which guides our decision-making. AACo's strategy rests on five key pillars.
Delivering full potential from our brands, developing our natural resources and assets, a simpler and more efficient AACo, executing on our sustainability framework. Finally, making AACo a great place to work. We executed on this strategy in FY 23. I intend for that to continue in FY 24. My initial focus is on refining and improving the strategy under the same pillars. Making the adjustments that are necessary to suit any changing conditions that we face. Continuing to deliver value for shareholders. With key executive positions filled, including Chief Financial Officer, Glenn Steadman, we have a highly experienced team to guide AACo into the next phase of its growth. In FY 23, we are seeing the results of many years of hard work. This gives us a strong foundation to build from.
Some of the key FY23 highlights under each of these strategic pillars are found on slide 7. Our efforts to place the right cuts in the right markets at the right time drove a 17% increase in Wagyu meat sales price per kilogram, and was a key driver behind our improved operating profit. Our strategic focus on the North American market is paying off with 22% growth in branded sales, demonstrating how the strength of our brands and our strategy drive improved results. I'm happy to announce that we have commenced a major increase in our production capacity with the expansion of the Goonoo property. Once operational, we will be able to further improve our value chain and boost our global supply. We have also now converted 62% of our water bores to solar, which is a total of nearly 400 in total.
We are also developing our natural resources and assets by advancing our cropping trials in the Gulf of Carpentaria. Notwithstanding our herd growing by 13% and producing 19% more live weight kilograms, whilst being operating in a high-cost environment, we were able to hold our cost of production stable with a 2% reduction per kilogram. I think it's a great demonstration of how we are creating a simpler and more efficient AACo as we continue making operational efficiencies throughout the supply chain. I'm proud of our achievements as we continue executing on our sustainability framework. These include driving efficiencies through our beef cattle herd management carbon project, which are the equivalent of avoiding 191,000 tons of emissions. This generated Australian carbon credit units worth more than AUD 7 million for the year.
It's one of several key outcomes under this strategic pillar. I'll share more with you shortly. Our drive to make AACo a great place to work has benefited teams across the supply chain, including improvements in safety, which resulted in a 37% improvement in lost time injury frequency rates, and a significant reduction in severity on occasions when injuries do occur. We have also made progress in diversity and inclusion and now have 40% of leadership positions occupied by women throughout the company. Moving now to slide 8 and more on our sustainability program. It's been 18 months since AACo released its sustainability framework and announced several key commitments to pursue over the following years. Our momentum in this pillar continues to build with progress under each commitment and in many other areas.
In addition to the activities already mentioned, AACo's Asparagopsis trials concluded in the second half of the year, with the results currently being analyzed. These outcomes will help inform decisions on the future use of feed additives and the potential broader market drivers that influence the viability of methane abatement strategies. We have also progressed our innovative approach to improving the environment with the continued development of a tool to monitor pasture availability and to assist with forage budgeting, and advanced our landscape carbon commitment, including collecting a significant amount of soil sample data, which will be used to continue building our innovative carbon management tool. Turning to our regional performance as we deliver on the full potential of our brands in market.
We've previously highlighted North America as one of our highest priority regions, and the results achieved in FY 2023 demonstrate why that remains the case. With consistent demand and strong pricing across all Westholme cuts. Our commercial teams achieved a 22% increase in revenue with consistent volumes. Our investment made in previous years is paying off. The higher proportion of branded sales followed a focused effort on engagement to deepen relationships with our established networks, including our distributor partners and our customers. High-profile US-based chefs collaborated with AACo and Westholme on social media and through targeted in-person events designed to introduce brand to new customers. This helps to create real opportunities for menu placements at new restaurants. One of those chefs is Nancy Silverton from chi SPACCA in Los Angeles, who you can see there on the presentation. Moving to Asia on slide 11.
Asia remains our biggest region by volume and revenue. Despite moving higher value cuts to food service markets and increased competition from local cattle breeds and beef brands, we were still able to maintain our strong market position and increase pricing in the region during the period, achieving revenue growth of 13%. Darling Downs still has strong brand recognition across Korea. This was enhanced through our marketing activities, including in-store tasting experiences, to encourage and further influence consumer behavior. We also made investments in our digital presence through social media and a new website that will expand consumer reach and engagement and support the premiumization of Darling Downs in Korea. Moving to Australia on slide 12. Australia will always be our spiritual home.
We are particular about the restaurant partnerships here to ensure we can honor both the prestige of Westholme and the unique history of AA Co in this country. Activations, along with restaurant and chef collaborations, increased the brand awareness of Westholme in Australia and resulted in key menu placements during the period. Our focus in this region through FY 2023 has been on optimizing value, which led to a 13% increase in revenue for the period. Turning to slide 13. There has been a pleasing revenue growth in Europe and the Middle East, up 43% on prior period. It is predominantly a high-end food service market that is still recovering post-COVID. The region serves a number of purposes for AA Co, including creating price tension as high-priced alternatives to other markets and to help us deliver the full potential of our brands.
This market will continue to be a focus area for us with selective expansion into new affluent regions. I'll now hand over to Glenn, who will take you through our financial performance in more detail.
Thank you, Dave. Good morning, everyone. It's a pleasure to be with you today to take you through our full year results. AA Co's trend of positive operating profit has continued this year. As Dave mentioned earlier, total operating profit improved by 35% to AUD 67.4 million this period. We also achieved a higher operating profit margin of 21.5%, which is up 3.4 percentage points. A 17% increase in average Wagyu meat sales price per kilogram to AUD 21.98 was a key driver behind the stronger operating profit and increased total revenue to more than AUD 313 million. Operating cash flow is down 34% on the prior period, remains strong at AUD 16 million.
The lower operating cash flow reflects a conscious decision to invest in the herd, which is now approximately 433,000 head. The long Wagyu life cycle means it takes several years to realize this investment. Total assets are now AUD 1.6 billion, taking net tangible assets up 14% to AUD 2.59 per share. Moving now to Slide 16, where I'll talk through the revenue in more detail. Total revenue grew AUD 37.3 million, largely driven by improved pricing on our branded products in market. Price increases in all cuts across all major markets show the value of strategically allocating our product and ensuring the right cuts are in the right markets at the right times.
The 17% increase in meat sales price per kilogram, or 11.4% on a constant currency basis, added AUD 35 million in meat revenue. Cattle sales revenue was largely flat. The strong trading and restocker cattle markets continued to support cattle prices predominantly in the first half, offset by lower volume sold compared to the prior period. Turning to our P&L on slide 17. As mentioned, operating profit improved by AUD 17.5 million to AUD 67.4 million this period. This is mainly due to AUD 25.2 million in higher total gross margin, a direct reflection of the increased price performance we spoke about earlier. Inflation and global supply chain challenges continued to be felt by the business, with higher processing, freight, and storage costs all impacting these results.
Net profit after tax is down on the prior period to AUD 4.6 million. However, as Dave indicated earlier, this has been largely impacted by an unrealized mark-to-market reduction in the value of our herd. Moving to the cash flow on slide 18. The business continued to generate positive operating cash flow this period with the net operating cash inflows of AUD 16 million. The reduction in operating cash flow is due to several factors. We've increased cash outlays for production costs, supporting a 19% increase in live kilograms produced. This expenditure was capitalized and not impact the current year operating profit. There's been additional funding deployed to right-size the business post-Covid, and our commercial momentum has meant an increase in working capital levels at period end. Turning to slide 19, our balance sheet. Our balance sheet remains strong and has improved its position from the prior period.
Overall, net assets grew to AUD 1.6 billion, largely due to a AUD 294 million increase in the value of our properties. The revaluation of the herd, due to softening in Australian cattle prices, has been offset by an increase in herd size, which, as mentioned earlier, has grown 13% to 433,000. Net tangible assets are now valued at AUD 2.59 a share, and our gearing ratio of 21.5% remains well within our target range of 20%-35%. We also have significant borrowing capacity available of approximately AUD 227 million and continue to maintain substantial headroom within our covenants. With that, I'll hand back to Dave Harris to take you through our operating environment and provide closing remarks.
Thanks, Glen. Let's move to slide 21 and our operating outlook. We have recorded an exceptional wet season across our properties this year. This will put us in good position with strong pasture growth that will benefit our cattle through the supply chain. The rain has also filled our river systems and lakes to levels that, in some cases, have not been seen in a decade. More broadly, there are current global conditions influencing AACo, including the ongoing geopolitical tensions that will continue to disrupt the global economy and supply chains. Inflationary pressures that will impact the cost of key inputs. The recent herd liquidations in the U.S. and Korea have increased supply into general beef markets. However, this could also materialize as an opportunity for AACo in the future as supply is limited while these herds rebuild.
Importantly, as we have mentioned throughout our presentation today, continuing to build on our strong foundations puts us in a good position heading into FY 2024. In closing, I'd like to thank the AACo team for their hard work to produce this result, as well as our shareholders for their continued support. This result shows that we are making tangible progress against our strategy. We remain laser-focused on executing on these strategic pillars whilst creating a strong culture amongst our teams and driving value across the supply chain as we evolve together to benefit future generations. Thank you for joining us this morning. That is the end of our presentation, and we are 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 1 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, who asks, "Is it pleasing to see the good results and further increase in the NTA? I wonder if the board could share the strategy to address the significant gap between the NTA and the share price.
Thank you very much for the question. Look, that's obviously a matter for the board to comment on there. What I can say is from my perspective and executive and management's perspective, we're really pleased about the FY 23 result, and we think it shows that we're making really good progress delivering on our strategy. It's one of the strongest operating results that we've seen in recent memory with an operating profit up 35%. We've increased our margins and boosted revenue by 14% by securing better pricing on our brands in market. On an operating basis, I think we've done a really good job to control costs in these high inflation environments, keeping that total cost of production per kilo down by 2%. I think we continue to make really good progress on sustainability.
More broadly, I'll focus and management will focus on the things that we can control, and that's continuing to try and deliver the best operating profits that we can and delivering on the strategy.
Thank you. Your next webcast question comes from Eric Chen, who asks, "When will the company pay dividend?
Yeah, look, again, that's a question for the board, that one. Like I said on the previous question, our focus from an executive perspective and a management perspective is to continue to deliver results, for all shareholders.
Thank you. We are showing no further questions from the webcast or the phone lines. That does conclude our conference for today. Thank you for participating. You may now disconnect.