Australian Agricultural Co · AAC.AX

AACo is Australia's largest integrated cattle and beef producer (200-year heritage, oldest continuously operating company in Australia). Operates ~6.5M hectares across 19 owned cattle stations + 3 leased + 2 owned feedlots + 2 owned farms + 1 leased farm in QLD and NT. CRITICAL CHANGES vs prior version of this file: • Prior version had a structural double-count between an aggregated 'Carrum/Glentana/Wylarah/Aronui' row AND separate named rows for those same 4 stations — caused total acres to appear as 16.5M (vs actual 15.8M) • Prior pastoral total was ~$4.3B at $250-280/acre across NT/QLD extensive — overstated 2.7× vs LAWD audited mark of $1,588.5M ($100/acre weighted) • Cropping farms were undervalued at $4,500/acre vs LAWD $9,750/acre — corrected 2.2× upward • Feedlots were dramatically undervalued at $1,500/acre vs LAWD $16,800/acre — corrected 11× upward (Standard Cattle Unit valuation methodology was previously missed) • Goonoo cluster split: pastoral station ($35M) + feedlot infrastructure (in $168M aggregate) + farm (in $156M aggregate) PRIMARY FMV ANCHOR: LAWD Pty Ltd performs annual independent valuations using AASB 13-compliant Direct Comparison method. AACo's Note A4 discloses three methodologies + their unobservable inputs and ranges: 1. **Productive Unit Approach** — applied to 17 cattle stations ($1,264M total, $3,207/AE avg, range $1,970-$6,818). Uses $/Adult Equivalent based on carrying capacity x dollar/AE rate inferred from comparable sales. Dr Steve Petty of Spektrum performs adult-equivalent assessments via scientific grazing analysis. AACo's productive-unit per-AE range is far below the FY24 high of $10,935/AE — methodology has tightened. 2. **Hectare Rate Approach** — applied to 2 cropping farms ($156M, avg $3,410/ha = $9,750/acre, range $2,662-$4,156/ha). Excludes structures (residences/sheds/yards) which are added separately. 3. **Hectare Rate + Standard Cattle Unit Approach** — applied to 2 feedlots ($168M, avg $8,316/ha = $16,800/acre, with SCU range 22K-45K avg 33.5K). Combines land at hectare rate + feedlot infrastructure at $/SCU rate. FY25 RECONCILIATION: Pastoral property at fair value: $1,588.5M Industrial property at cost: $36.6M Plant and equipment at cost: $51.7M Capital work in progress: $8.3M Total PP&E (FY25): $1,685.2M ✓ + Livestock at fair value: $595.8M (excluded from this file — biological asset) Total FY25 revaluation increment: +$44.8M (+2.9% YoY pastoral) reflecting Goonoo Feedlot Expansion + market value increases NTA per share: AUD $2.55 (vs $2.51 FY24) LAWD vs HEADLINE BROKER COMPS: Like the AGRO/Adecoagro pattern, LAWD's portfolio-going-concern valuation produces per-acre figures well below headline broker transaction prices (~$200-380/acre Elders QLD pastoral). The discount reflects: - Portfolio-liquidity (selling 6.5M ha in any reasonable timeframe is impossible) - Going-concern (current pastoral use, not highest+best) - Extensive vs developed mix (most AAC stations are deep-extensive Barkly/Channel Country) - Climate-risk overlay (LAWD applies long-term sustainable carrying capacity, not boom-cycle) Cap rate ranges 5.0-8.0% reflect extensive pastoral going-concern yields. Industrial cap rates 7-12% reflect feedlot/processing infrastructure operating yields. The FMV-weighted blended cap rate accurately reflects AACo's multi-segment beef-vertical structure. DEEMED COST DISCLOSURE: Note A4 shows that if pastoral property were carried at deemed cost (FY05 fair value + subsequent acquisitions at cost) instead of fair value, carrying amount would be only AUD $320.2M — implying $1,268M of cumulative fair value uplift over 20 years. Confirms LAWD's $1,588M is genuine FMV mark, not historical cost.