AACo’s FY25 Operating Profit Climbs to $58.4 Million on Strong Sales Volumes

AACo’s Financial Performance in FY25

Australian Agricultural Company Limited (ASX: AAC) has delivered a strong operating performance for the 2025 financial year, posting an operating profit of $58.4 million and operating cash flow of $27.1 million. This marks AACo’s highest operating cash flow and second-highest operating profit since 2017, underscoring the company’s resilience amid evolving global market conditions and inflationary pressures.

Revenue increased by $52 million to $387.9 million, driven primarily by growth in meat and live cattle sales volumes. Despite a 5% rise in production costs per kilogram, AACo maintained disciplined cost management, which helped offset inflationary impacts and supported a stable herd size of approximately 455,852 head.

Navigating Market Dynamics and Pricing Pressures

While the Wagyu meat sales price per kilogram declined by 10% compared to the prior year, reflecting challenging market conditions such as prolonged herd liquidations in the US and increased supply in Korea, AACo saw encouraging signs of price recovery in the second half of the year. The company’s strategic allocation of products and strong distribution network helped protect pricing in key regions, positioning AACo to respond effectively as market conditions improve.

Statutory net loss after tax narrowed dramatically to $1.1 million from a loss of $94.6 million the previous year, largely due to improved herd valuation and a $45.9 million increase in property and infrastructure values. This contributed to a 2% increase in net tangible assets per share to $2.55.

Brand Expansion and Market Penetration

AACo’s premium brands, Westholme, Darling Downs, and 1824, continued to gain traction in domestic and international markets. Westholme, positioned as a nature-led Australian Wagyu brand, saw a 17% increase in sales value following its recent launch. Darling Downs expanded its footprint in Korea despite local competition, increasing volume by 19% and securing placements in 134 Emart locations. The 1824 brand, relaunched in early 2024, achieved a 9% price increase and notable growth in sales volume, reflecting strong demand across retail and food service sectors.

Investing in Sustainability and Infrastructure

Strong operating cash flow enabled AACo to reinvest in its supply chain and infrastructure, focusing on sustainability initiatives such as improved land condition through innovative stocking models and participation in the Zero Net Emissions Ag CRC. The company also registered its first soil carbon project, embedding sustainability into its core operations. Investments in station facilities, fleet optimisation, IT, and safety programs aim to build resilience and efficiency across AACo’s extensive operations.

Strategic Refresh and Future Outlook

AACo has refreshed its corporate strategy around three focus areas: Better Beef, Partner and Invest, and Unlock the Value of the Land. These priorities align with the company’s strengths and growth ambitions, supported by a renewed purpose, “Reimagining Australian agriculture to share with the world”, and values emphasizing curiosity, generosity, and ownership of impact. CEO David Harris highlighted the company’s preparedness to navigate uncertain global beef markets, particularly in key regions like Korea, North America, and Europe, where local supply is contracting.

As AACo embarks on this next phase, the company’s integrated supply chain and brand portfolio position it well to capitalize on emerging opportunities despite ongoing economic headwinds.