ELDERS LIMITED — Capital/Financing Update 2011

Oct 2, 2011

3 October 2011

Completed and intended asset sales a nd earnings expectations

Elders (ASX:ELD) announces trans a ctions, board decisions and revised expectation s as follows:

1. Forestry

Elders has signed contracts for the s ale of surplus forestry land valued at $19 million under its Staged Capital Release Program and resol v ed to expand the program to a staged divestme n t of all forestry assets, which will now be considered as as s ets held for sale.

The decision to move from the targ e ted divestment announced at the FY11 half year to a staged total divestment has been made followin g the receipt of credible, non-binding offers for various pulpwood plantation assets. It is considered that shareholder value is better served by withdra w al from the sector to release and redirect capital to debt r eduction and reinvestment in other operations.

Elders Managing Director Malcolm J ackman said “recent trends in woodfibre deman d and prices have depressed returns and extended pa y back horizons beyond what is appropriate for Elders”.

“This is a very clear and compelling decision. The capital invested in forestry is not p roviding sufficient benefit to our share price, earnings o r cash flow and, in our view, the case for retenti o n and ongoing investment no longer measures up f or shareholders” he said.

Progress of Staged Capital Releas e asset sales to date

Central Queensland: Elders has sol d , or contracted for sale, properties for total expe c ted gross proceeds of $19 million, with further properties at advanced stages of negotiation. Negotiations w ith potential buyers in respect of the remaining Central Queensland land are in progress.

Northern Queensland: Marketing of Northern Queensland plantation properties com m enced in September 2011 with a view to contracting sale s of these properties by calendar year end.

Sandalwood: Ongoing and incompl e te discussions are being held with a number of p arties in respect of sale of the approximately 2,000 ha of sa n dalwood interests and associated freehold land m anaged by Elders.

Other forestry assets

Elders will now proceed with the staged divestment of its other forestry assets. These assets include pulpwood assets in the Portland region, South-West Western Australia and Esperan c e, a teak estate in Northern Queensland, and the Alba n y Woodchip Terminal.

As Elders proceeds with various pr o jects in the staged divestment it will determine w h at adjustments are required as a result of this change i n intended use. This is likely to require the realig n ment from its current book value from an ongoing forestr y operation to one of estimated fair value for reali s ation. In addition,

1

Elders expects provisions of an as y et unquantified amount in respect of items including onerous contracts and restructure costs.

Elders has commenced negotiation s with customers for new supply agreements for i t s certified plantation grown woodchip. Any revision to w o odchip prices can be expected to impact the val u ation of Elders’ forestry assets.

Growers’ interests

Elders looks forward to working tog e ther with the responsible entities and growers with a view to achieving an orderly exit which is mutually be n eficial for all stakeholders. Growers with enquiri e s can contact Elders Forestry Investor Services on telep h one 1300 732 822 or via email at adviserservices@eldersforestry.com.au.

2. Elders Toepfer Grai n

Elders is to exit its involvement in g r ain trading through the Elders Toepfer Grain (ETG) Joint Venture and concentrate on farm-gate services t o Australian grain growers.

On 30 September 2011 Elders agre e d in-principle terms for the transfer of Elders’ 50% share in ETG to the joint venture’s other shareholder To e pfer International with an effective date of 31 A u gust 2011. Elders will continue to accumulate grain for To e pfer under a new accumulation agreement.

Elders’ Managing Director Malcolm J ackman said that the decision to exit the joint v e nture reflected Elders’ desire to focus its efforts on grain a c cumulation without exposure to the volatility inh e rent in grain trading.

Elders will record a total charge of $(13.5) million from the sale of its shareholding in ETG, inclusive of FY11 operational results, to be recorded a s a non-recurring item in the 2011 result.

3. MV Torrens

Elders has completed the sale and r e-charter of its sole livestock export vessel, the M V Torrens, as part of a package of agreements which has i n creased and extended Elders’ access to shipping capacity out to 2016. The vessel was sold for USD $4.0m and Elders anticipates proceeds of approximate l y that amount. A small profit on book value has been realis e d.

Inclusive of operational results, Eld e rs will record a total charge that is estimated to b e $(2)-(3) million in its FY11 accounts from the vessel, to b e recorded as a non-recurring item in the 2011 r e sult.

Malcolm Jackman said that the sale and chartering agreements reflected Elders’ confidence in the outlook for its business in the live export of c attle.

2

4. Financial Statemen t implications

Known and quantified fair value adj u stments and non-recurring items to be included i n the FY11 accounts arising from the foregoing are estim a ted below. Elders expects further, but as yet unquantified, fair value adjustments arising from the now e x panded sales process and woodchip price negotiations. As and when details of the fair value adjustments become clear, relevant information will be released to the ASX.

	$m
Forestry
Fair value adjustment on Centra l Queensland land recently
contracted	(8)
Other fair value adjustments to la nd	(9)
Provisions for onerous leases an d remediation costs on cyclone
affected land	(15)
Fair value adjustments to accrue d income	(5)
Elders Toepfer Grain	(13)
M V Torrens sale and discontinuedo perations	(2-3)

As at 31 March 2011 the book valu e of Elders’ forestry assets was $523.6 million.

5. Earnings

Results from Forestry, Elders Toepf e r Grain and the MV Torrens will be included in S tatutory Profit but excluded from FY11 underlying inc o me.

Elders’ underlying earnings for FY1 1 will be determined with the finalisation of accou n ts, and also remains subject to significant variation from y ear end mark-to-market adjustments and results for September. Current earnings expectations, exclusive of m ark-to-market adjustments, is for an underlying net profit after tax ranging between $1 million and $5 m illion. This expectation reflects the reallocation o f results from Forestry, Elders Toepfer Grain and the MV T o rrens and recent trading results. At this stage, E lders is not issuing guidance in respect of FY12.

Elders expects to provide further m a terial information to the ASX on the progress of s ales, value adjustments, impairment amounts and anticipated costs and charges in accordance w ith its continuous disclosure requirements at appropri a te points and once the relevant amounts or rea s onably likely amounts have been reliably determined.

Further comment:
Malcolm Jackman	Chief Execut ive Officer	0439 642 876
Further information:
Mark Hosking	Chief Financ ial Officer	0439 833 816
Don Murchland	GM Investor & Corporate Relations 0439 300 932

3