Australian Agricultural Company Limited

AACo reported total revenue of $422.1 million for FY26, up 9% year over year. Operating profit was $71.6 million, up 23% year over year and the highest since the metric was introduced in 2019; management also said underlying operating profit excluding the North Queensland flood was $80.6 million. Gross operating margin was $146.7 million, and core free cash flow was $0.8 million, an improvement of $11.4 million from the prior period. Statutory result after tax was $107.3 million, supported by a $128.6 million unrealized fair value gain on livestock; net tangible assets were $1.8 billion, or $2.92 per share, up 15%. Forward-looking commentary was qualitative rather than formal guidance: management expects beef demand to remain strong, but is monitoring tariffs, the Middle East conflict, freight, energy, transport and production-input costs, while focusing on resilience, cost discipline and Better Beef execution. They also noted 215 bores have been converted to solar and that their Glentana soil carbon project is registered with the clean energy regulator, with first ACCUs expected in coming years.

Dave Harris framed FY26 as a record year achieved despite major external challenges, especially flooding in the Gulf of Carpentaria region. He emphasized the company’s strategy around better beef, unlocking land value and partner/invest, and said AACo is focused on improving quality, quantity and consistency while building medium- to long-term value. His tone was confident and optimistic, but grounded in resilience, cost discipline and the need to manage uncertain market and environmental conditions.

Glen Steedman highlighted the main financial measures AACo uses because they exclude unrealized valuation swings: operating profit, beef sales price and core free cash flow. He cited FY26 operating profit of $71.6 million, gross operating margin of $146.7 million, core free cash flow of $0.8 million and statutory profit after tax of $107.3 million, along with net tangible assets of $1.8 billion or $2.92 per share. He also said livestock value rose by $178.3 million, the herd grew 6% to 482,000 head, pastoral property values increased by $153 million, and gearing remains at the low end of the 20% to 35% board target range, supported by refinanced debt facilities.

Analysts focused on whether improved breeding/calving rates were mainly seasonal or structural, and management said it was a mix of several good seasons, improved genetics, better land condition and lower carrying capacities aimed at rebuilding ecological quality and reducing variable costs. Questions on the Goonoo expansion drew the response that the added finishing capacity will take time to flow through because feeding programs run about 300-plus days, but management expects higher volumes at the front end in future years. On costs, AACo said freight costs are up about 20% since the Middle East conflict and it is working to prevent cost creep; Glen added that over the next 24 months up to 60% of expected international sales are hedged at around $0.65. On price performance, management said beef pricing improved linearly through the year, with the back half stronger, and that the global brand/distribution model makes direct comparison to 90CL imperfect.