The Livingstone Beef factory’s suspension comes amid operating losses of $22.4m. The $100m facility, located outside of Darwin in Australia’s Northern Territory, was opened in 2015.

Following a strategic review, the decision was made to stop ongoing losses before the first half of 2019 as challenging seasonal conditions resulted in higher input expenses and an increased cost of production.

According to AACo the decision will allow them to put a stop to current operational losses and further simplify their business model and focus on profitable growth. They believe the plant could again be profitable and that there was “substantial optionality value” in the correct market environment and right operating model.

The company has stated that during the suspension the plant will be “maintained at a level that enables an efficient restart should prevailing macro conditions be sufficiently supportive, while minimising costs in the meantime".

The closure has resulted in a one-off write-down of $74.9m including a one-off non-cash impairment of $69.5m with respect to buildings, improvements, plant and equipment and an additional $5.4m provision recorded for an onerous contract in relation to Livingstone Beef.

Overall, the company’s earnings declined from $45m in 2017 to $13.6m in 2018 as they were impacted by increased competition, reduced volumes and increased input costs.

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