Optimistic Forrest banks on beef
Mining billionaire Andrew Forrest is banking on Harvey Beef becoming a handy cash cow over the next few years judging by documents lodged with the corporate regulator.
His management team at WA's biggest beef exporter expects to make earnings before interest, tax, depreciation and amortisation of about $8 million each year until the end of the decade.
The qualified forecast is based on the abattoir's average EBITDA from 2010 to June 30 last year.
The directors of Harvey Industries Group said the estimate was subject to uncertain factors, including cattle supply, cattle prices and operating costs.
Industry leaders have warned of a cattle shortage in WA based on increasing demand from live exporters and local processors.
Live cattle exports from WA jumped 56 per cent to 305,000 head in 2013-14 and 410,000 cattle were processed in local abattoirs, up 5 per cent on 2012-13.
In its latest beef commentary, the Department of Agriculture and Food WA said the State's cattle herd had dropped to from 2.21 million head in 2010 to 1.88 million before the surge in exports and processing in 2013-14.
Harvey Beef processes about 145,000 cattle a year and is planning a multi-million dollar upgrade to boost capacity.
It made a profit of $4.8 million for the six months to June 30 last year, with revenue of $85.3 million. The result followed a $5 million profit in 2013.
Mr Forrest and his family purchased the business from overseas interests behind Mani Assets Corporation last May for about $45 million.
