Select Harvests Limited

Select Harvests reported FY2025 NPAT of $31.8 million, up from $900,000 in 2024. EBITDA grew $37 million, or 81%, to $82.4 million, while operating cash flow increased by $109.1 million to $118.6 million. Almond price averaged $10.18 per kilogram, up 32.4% from 2024, while crop volume fell 15.7% to 24,903 metric tons; production costs on a normalized 29,000-tonne basis were held flat at $6.71/kg. Gearing fell from 34% to 15.1%, net debt halved to $79.1 million, and the company said it has $170 million in undrawn committed facilities within a $240 million total committed facility. No dividend will be paid for FY2025. Looking ahead, management said the current market implies about $10.07/kg consensus pricing, while Select would expect about $10.30/kg if the entire crop were available to sell today; about 55% of the 2026 crop is hedged at $0.6485.

David Surveyor framed the quarter as evidence that the almond macro is improving and that Select Harvests is benefiting from self-help initiatives. He emphasized record safety, tighter cost control, better farming practice, improved processing, and better price capture, saying profitability is rising even with a lower crop. His tone was confident and strategic, repeatedly pointing to a stronger medium-term pricing outlook, continued innovation through the PMO, and a business model that now creates value across horticulture, processing, and sales.

Liam Nolan focused on the earnings bridge, balance sheet improvement, and liquidity. He cited NPAT of $31.8 million versus $900,000 in 2024, EBITDA of $82.4 million, operating cash flow of $118.6 million, and gearing falling to 15.1% from 34%; he also noted net debt of $79.1 million. He said financing costs improved through refinancing, including a 61 basis point reduction versus 2024 and more than 200 basis points lower on the overdraft facility, with $170 million of undrawn committed facilities providing liquidity. He also outlined capital allocation: keep gearing moving lower, maintain base capex around 80% of depreciation, fund growth projects like Optimus and shakers, and return excess cash later through dividends and buybacks when appropriate.

Analysts pressed management on FY2026 costs, third-party processing growth, China/India demand, tariffs, crop outlook, and the logic for skipping dividends despite a much stronger balance sheet. Management said roughly $20 million of hard cost inflation is expected in 2026, mainly water, bees, and electricity, but believes a large portion can be offset by yield and recovery initiatives such as kernel recovery and shakers. On third-party volumes, David Surveyor suggested a bounce back to normal crop size could put external grower volume around 10,000 tonnes, with additional upside from value-added price increases flowing through existing contracts. On dividends, management said gearing needs to come down further and remain lower for longer before distributions resume; on bees, they described South Australian supply constraints and said they are pursuing more bee security, including sourcing from Western Australia and potentially buying bees.