Select Harvests managing director, David Surveyor, said the company’s $1.5 million net profit after tax (NPAT) for FY24, represents more than a $116 million turnaround from FY23, with an operating cash flow of $21.3 million being a 545.5 per cent increase on FY23.
Snapshot
- EBITDA: $46m (FY23 EBITDA loss of $117.1m);
- reported NPAT: $1.5 million (FY23 NPAT loss of $114.7m);
- 2024 almond crop: 29,527MT, up 49.3% on prior corresponding period (pcp);
- external grower crop: 10,520MT, up 208.1% pcp;
- almond price: $7.69/kg, up 19.6% pcp;
- operating cashflow: $21.3m (FY23 $3.3m), up 545.5% pcp;
- net debt: $162.3m (FY23 $190.2m);
- earnings per share: 1.24 cents per share (FY23 loss per share: 94.80 cents per share); and
- no final dividend declared for FY2024
Surveyor said, “The company is now well positioned to go forward and the previously communicated delays in cash receipts of $56 million caused by logistics issues are resolved. All outstanding FY24 documentation has been delivered to customers, containers are shipped, with $51 million of cash collected. The balance is on normal terms with customers and is expected to be receipted prior to 31 December 2024.”
With the supply and demand dynamics of the industry returning to a “more balanced positioning”, declining crops in the US are improving supply side economics, the company said.
“The Company continues to see strong demand from China and India. With an improved supply and demand dynamic, prices have been increasing in recent months and these increases are continuing.
“The Company has controlled operating costs and, despite increases in lease cost recognition and inflation, total production costs per kilogram are lower than last year.
“A $6.6 million impairment has been recognised on Select Harvests’ Yilgah (leased) orchard following four consecutive years of wet conditions and yield underperformance.”
Water
The company’s water rebalancing program is on track, Surveyor said, with cash generated from water sales being used to acquire water closer to farming operations. A $12.5 million gain was made in FY24, with $6.7 million recognised and the remaining $5.8 million to be recognised in FY25.
Logistics
Select Harvests’ project management office (PMO) completed 27 projects with a profit of $32.2 million, with this gain offset against a $1 million provision for the logistics issue and the inflationary pressures felt by all Australian business. The net gain is $15 million. Surveyor said the company is implementing plans to mitigate logistics risks by adding a new service provider and reducing dependence on external suppliers by increasing its internal logistics capability.
Capital Raise
The company completed a fully underwritten $80 million capital raise to reset the balance sheet by reducing debt and funding a further 10,000MT expansion as part of its transformation strategy.
The institutional offer raised $58.9 million, net of costs and the retail offer raised $17.4 million, net of costs.
Market outlook
The continuing consumer trend for health foods makes for a bright future for almonds. Because bearing acres in the US have peaked, it’s crop output is falling.
“The US objective forecast is for 2.8 billion pounds, and the initial feedback suggests the actual crop is more likely to be smaller. Carry-forward inventories are also low, and history suggests that this is likely to remain the case for at least the next few years. These factors will help support prices in Australia,” the company said.
Surveyor said FY24 have been a “significant improvement” over FY23, with the company’s sales the highest in its history.
“Our processing facility delivered increased the plant’s capacity to 40,000MT. As a result of the targeted initiatives delivered, we have successfully reduced the total cost of production for the FY24 crop.
“The 2025 crop growing program has commenced and the company is executing a full horticultural plan. Water allocations remain favourable, dam storage levels are high and temporary market water pricing is expected to remain at below average levels.
“The company is seeking to maximise its earnings going forward with a program for crop yield improvement, more efficient cost profile, increased capacity to process third party product and improved sales and marketing capability,” Surveyor said.
