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How did Elders and Bega shares respond to the latest bushfire updates?

Kate O'Brien

The bushfires tearing across Australia have caused untold damage to homes, farms, and agricultural land, and ASX shares have not been immune to the devastation.

Last week, Elders Ltd (ASX: ELD) and Bega Cheese Limited (ASX: BGA) provided updates on the impact of the fires on their operations, which saw their share prices fluctuate across Thursday’s and Friday’s trade.

Elders

Elders reported that none of its property has been damaged and all of its branches remain operational. Many of its people, however, have been impacted by evacuations and property loss, and Elders is supporting them with a range of employee support services. A number of Elders’ clients have experienced devastating property and livestock losses. The company is offering is offering hardship relief options for impacted clients, including interest free periods and extended repayment terms. 

In the immediate term, Elders advises that livestock agency commissions and farm supply sales are expected to be negatively impacted in bushfire affected regions. The company, however, expects this will be offset by increased demand for farm supplies, including fencing, and the need for restocking, once fires ease and the rebuilding effort commences. Trading in the first quarter of FY20 was in line with Elders’ expectations and the company remains comfortable with market consensus regarding full year results. The Elders share price closed lower on Thursday following the news, but rallied to close out the week’s trade, up 1.29% on Friday at $6.26 per share.

Elders advises that its people are on the ground helping where they can, including “volunteering to fight fires and protect property, feed and relocate surviving livestock, and bring relief and aid to those in need.”

The company will be contributing to the rebuilding effort via financial and in-kind donations, including an initial $100,000 donation. 

Bega

Last week, Bega reported that it expects to lose 1.9 million litres of milk as a result of the bushfires. Total volume of milk unable to be collected due to road restrictions is expected to reach 900,000 litres. Milk supply is anticipated to be reduced by another million litres as two suppliers dry their herds off earlier than planned due to the fires. According to Acting Chairman Max Roberts, “these milk losses will have no material overall impact on Bega’s operations.”

Bega’s share price lifted on Friday following the reassurance and closed up 4.5% at $4.41 per share.

The company’s factories in Bega recommenced production this week with the majority of employees returning to work. The dairy operator advised that while the bushfires have had minimal direct impact on its operations, they have had a significant impact on some farmers and employees. 

A Bega Crisis Management team is working alongside volunteers to provide generators, feed, fencing, and other assistance to repair farms and keep milk flowing. Bega expects some of the costs of this assistance to be covered by business interruption insurance. Acting Chairman Max Roberts said, “we have been working closely with our farmers providing and connecting generators to enable daily milking and also supplying feed for cattle.”

The post How did Elders and Bega shares respond to the latest bushfire updates? appeared first on Motley Fool Australia.

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Motley Fool contributor Kate O'Brien has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Elders Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2020