Shares in Australian Agricultural Company (ASX:AAC) fell 1.75% on Thursday after the company downgraded its forecast on the anticipated impact of a boycott of cattle sales to Indonesia.
Minister for Agriculture, Fisheries and Forestry Joe Ludwig yesterday suspended the export of live cattle to Indonesia, following news reports on mistreatment of cows in some Indonesian abattoirs.
AAco said it supported the boycott, and would suspend exports until until Indonesian importers can guarantee a full cycle of humane and proper processing.
Because of the suspended sales, AAco has cut its 2011 ebitda forecast to between $50 million and $60 million, from previous guidance of $60 million to $65 million.
But AAco said good seasonal conditions and favourable results from the year's cropping programs would help mitigate the impact of the suspension. Cattle previously designated for export can also potentially be redeployed to other sales programs.
AAco has so far shipped 50% of its forecast cattle consignments for the year, the company said. The company is also planning to commission its own abattoir in 2H12.
AAC shares ended Thursday's trading at $1.400, the lowest closing price since December last year.