No Dividend Declared as Select Harvests Prioritises Debt Reduction Despite Profit Surge
Select Harvests has reported a striking turnaround in FY2025, with net profit soaring to $31.8 million driven by higher almond prices and operational efficiency, while halving its net debt.
- NPAT surged to $31.8 million from $0.9 million in FY2024
- EBITDA increased 81% to $82.4 million
- Net debt reduced by 51% to $79.1 million
- Almond crop volume down 16%, but price up 32%
- No final dividend declared, focus on debt reduction
Strong Financial Turnaround
Select Harvests Limited has delivered a remarkable financial performance for the fiscal year 2025, reporting a net profit after tax (NPAT) of $31.8 million, a dramatic increase from just $0.9 million the previous year. This surge was underpinned by a robust 81% rise in EBITDA to $82.4 million, reflecting improved operational efficiencies and favourable market conditions.
Despite a 16% decline in almond crop volume to 24,903 metric tonnes, the company benefited from a 32% increase in almond prices, averaging A$10.18 per kilogram. This price uplift was driven by strong global demand and constrained supply, particularly from the US market, which faces challenges including reduced acreage and climatic pressures.
Operational Advances and Strategic Focus
Operationally, Select Harvests has made significant strides in processing efficiency at its Carina West Processing Facility, nearing completion of an expansion that will boost capacity to 50,000 metric tonnes for FY2026. The company also piloted a project to recover additional kernels from hull and shell waste, aiming to increase yield by approximately 3%.
The company’s strategic pillars; expanding almond volumes, enhancing processing scale and efficiency, and maximising crop returns; remain firmly in focus. While growth initiatives beyond the core business are currently on hold, management emphasizes strengthening the base operations to leverage favourable macroeconomic conditions.
Financial Discipline and Market Outlook
Financial discipline is evident in the halving of net debt to $79.1 million and a net debt to equity ratio of 15.1%, supported by improved cash flow from operations, which surged to $118.6 million. The company restructured banking facilities to lower costs and improve certainty, reflecting a cautious but confident approach to capital management.
Looking ahead, Select Harvests remains optimistic about the almond market. Global demand for healthy, protein-rich snacks is expected to grow at a compound annual rate of 5% to 7%. Meanwhile, supply constraints in California due to water scarcity, labour shortages, and rising input costs are likely to support sustained pricing strength. However, the company has not provided a crop volume forecast for FY2026, reflecting ongoing uncertainties in growing conditions.
Dividend and Investor Considerations
Notably, the board has decided against declaring a final dividend for FY2025, prioritizing debt reduction and financial stability. This conservative stance signals a focus on long-term resilience rather than short-term shareholder returns, a decision that investors will watch closely in the coming year.
Bottom Line?
Select Harvests’ FY2025 results highlight a company balancing growth and financial prudence amid a promising yet volatile almond market.
Questions in the middle?
- How will Select Harvests manage rising input costs like water, bees, and fertiliser in FY2026?
- What impact will the processing plant expansion have on margins and capacity utilisation?
- When might the company resume dividend payments given its improved balance sheet?
