Select Harvests’ EBITDA Jumps to $60.7M as Almond Prices Surge to A$10.35/kg
Select Harvests Limited has reported a remarkable turnaround with a $28.7 million profit in the first half of FY2025, buoyed by higher almond prices and improved operational efficiency. The company also secured $240 million in refinancing, positioning itself for future growth despite a slightly reduced almond crop forecast.
- Net profit after tax of $28.7 million, reversing prior year loss
- EBITDA surged to $60.7 million from $18.4 million
- Almond crop forecast slightly down but price forecast up to A$10.35/kg
- Successful $240 million debt refinancing with extended maturities
- No interim dividend declared amid ongoing strategic investments
Strong Financial Turnaround
Select Harvests Limited has delivered a striking financial recovery in the first half of fiscal 2025, reporting a net profit after tax (NPAT) of $28.7 million compared to a loss of $2.4 million in the same period last year. This turnaround was supported by a substantial increase in EBITDA to $60.7 million, up from $18.4 million, reflecting improved operational performance and favourable market conditions.
Market Dynamics and Crop Outlook
Despite a forecasted reduction in the Australian almond crop to between 24,000 and 26,500 metric tonnes, down from nearly 29,500 tonnes in FY2024, the company is benefiting from a significant rise in almond prices, now forecast at A$10.35 per kilogram, up from A$7.69. Strong demand from key export markets such as China and India underpins this pricing strength, while supply constraints globally continue to tighten the market.
Operational and Strategic Progress
Operationally, Select Harvests is advancing its strategic pillars, focusing on increasing almond volumes, enhancing processing efficiency, and expanding capacity. The company is progressing with the second phase of its Carina West processing facility expansion, which will increase capacity to 50,000 metric tonnes. This expansion is partly ahead of schedule and represents a significant investment in future growth.
Efficiency gains have been achieved despite inflationary pressures and rising water costs, with stable costs to grow, harvest, and process almonds. Improvements in spray efficiency, labour management, and packaging have contributed to cost containment, while quality enhancements have been positively received by customers.
Balance Sheet Strength and Refinancing
Financial discipline is evident in the reduction of net debt to $168.2 million from $237.9 million a year earlier, lowering the gearing ratio to 32.7%. The company successfully refinanced $240 million in debt facilities, securing improved covenant terms and extending maturities to 2028 and 2030. This refinancing, which introduced a third banking partner, strengthens Select Harvests’ capital structure and reduces funding risk.
Regulatory Disclosure and Dividend Policy
In a regulatory disclosure, Select Harvests acknowledged a $3.5 million provision related to superannuation underpayments dating back to 2020. The company has voluntarily reported this to the Australian Taxation Office and is conducting a third-party review to ensure compliance. Meanwhile, the board has decided not to declare an interim dividend for 1H FY2025, with dividend considerations deferred until the full-year results.
Looking Ahead
With a strong foundation of operational discipline, strategic execution, and market positioning, Select Harvests is well placed to capitalise on ongoing global demand for almonds, driven by consumer trends towards plant-based and health-conscious foods. The company’s focus on safety and sustainable profitability remains paramount as it navigates the evolving agricultural and economic landscape.
Bottom Line?
Select Harvests’ strong half-year performance and refinancing set the stage for growth, but watch for crop yield and regulatory developments.
Questions in the middle?
- How will the superannuation underpayment review impact future financials or regulatory standing?
- Can Select Harvests sustain or grow almond yields amid environmental and market pressures?
- What are the implications of no interim dividend on investor sentiment and capital allocation?
