Agribusiness Elders Ltd. reported a $165 million first half loss, but forecasted improvement in second half earnings.

Elders first half net loss compares to a $328.8 million loss in the previous year.

The 2010 first half report included a $167 million in non-recurring items, mainly related to asset reviews and writedowns on value of Elders' shareholding in Forest Enterprises Australia

Elders also reported an underlying profit after tax of $1.1 million in its first half, up from $1.6 million in the previous corresponding period.

The rural services and automotive interiors provider announced no interim dividend will be paid.

Elders chief executive Malcolm Jackman said that the financial results evidenced improvement across the company's operations.

"There is a very real sense that our turnaround plans are gaining momentum," Jackman said." We look forward to growing cash flows from our forestry operations over the next five years as sales rise from the current level of approximately 400,000 tonnes per annum to over 2.5 million tonnes per annum.''

The company said it saw a recovery in grower confidence and demand volumes in its rural services operations in the first half, but that was more than offset by lower prices for chemicals and fertilizer products.

"Accordingly, the company anticipates a substantial lift in its earnings in the second half, given suitable rainfall in Western Australia and suitable market conditions," Elders said in a statement.

"This is expected to be sufficient to support the achievement of the prospectus forecasts... for underlying earnings and profit to shareholders."