Which ASX 200 share is crashing 22% on half-year results?

Elders Ltd (ASX: ELD) shares are crashing on Monday morning.

At the time of writing, the ASX 200 share is down 22% to $5.61.

This follows the release of the agribusiness company’s half-year results before the market open.

ASX 200 share crashes on results day

This morning, Elders released its half-year results and revealed a strong lift in earnings thanks to a major acquisition.

It reported underlying sales revenue of $1.77 billion, up 32% from $1.34 billion in the prior corresponding period. Management said the result was driven by improved seasonal conditions and the contribution from Delta Agribusiness, which was acquired in November.

Looking at its divisions, Elders Crop Protection delivered higher EBIT across all businesses, mainly due to improved procurement of raw materials.

Elders Rural Services also performed well, with livestock prices driving most of the upside.

Delta Agribusiness contributed EBIT of $10.4 million in its first five months under Elders’ ownership, while Elders Real Estate benefited from growth in residential turnover and property management.

Australian Independent Rural Retailers’ EBIT was slightly lower, with temporary people cost growth more than offsetting higher sales and margin improvements. Corporate Services and Other Costs increased due to higher IT costs linked to the transition of systems modernisation expenses and the cost of running dual platforms until legacy systems are retired.

This meant that underlying EBIT rose 33% to $76.6 million, while underlying profit before tax increased 31% to $56.2 million. Underlying profit after tax lifted 13% to $37.9 million.

However, the selling today may have been driven by earnings per share, which were negatively impacted by a higher share count following its capital raising.

Elders revealed that underlying earnings per share was down 4% to 18.1 cents.

This led to the Elders board declaring a fully franked interim dividend of 18 cents per share, in line with last year’s interim dividend, although last year’s payout was only 50% franked.

Management commentary

The ASX 200 company’s managing director and CEO, Mark Allison, was pleased with the half. He said:

The first half of FY26 has been eventful for Elders, with Delta Agribusiness welcomed into the Elders Group and seasonal improvements driving optimism for the winter crop.

Our decision to implement a new divisional structure in FY26 is already reaping benefits through improved alignment and efficiency gains. Elders’ strong management has proven effective in allowing us to optimise the season and set ourselves up for a solid second half.

Outlook

Elders believes it is well positioned for the second half.

This is being supported by the first-year earnings contribution from Delta Agribusiness, further systems modernisation benefits, and Delta synergy gains.

Management advised that it expects key financial metrics to improve in the second half as Delta’s earnings are progressively reflected and proceeds from the planned Killara Feedlot divestment are expected to reduce net debt, leverage, and interest expense.

However, elevated diesel prices remain a risk to the company’s cost base, although prices have eased from the highs seen in March.

Commenting on its outlook, Allison said:

International events have caused price volatility in fuel and fertiliser, creating challenges for our supply chain in the first half. Elders’ strong supply relationships, combined with an adept agronomy network for timely advice to growers, has allowed us to manage demand and ensure growers are equipped for the season ahead.

The post Which ASX 200 share is crashing 22% on half-year results? appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Elders. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.