Select Harvests Boosts NPAT by $116m on 29,527MT Almond Crop in FY24

Strong Financial Turnaround in FY24

Select Harvests Limited (ASX: SHV) reported a remarkable financial recovery for the fiscal year 2024, posting a net profit after tax (NPAT) of $1.5 million. This result marks a dramatic improvement of $116 million compared to the prior year, driven primarily by a record almond crop volume and favourable pricing dynamics.

The company harvested 29,527 metric tonnes (MT) of almonds, the highest in its history, with an average price of $7.69 per kilogram. This pricing reflects a rebound to levels last seen four to five years ago, supported by strong global demand and constrained supply, particularly from the US market where quality issues have reduced carry-in volumes.

Operational Efficiencies and Cost Management

Despite inflationary pressures averaging 3.4% annually, Select Harvests managed to reduce total production costs by 3% on a normalized 29,000MT crop basis. Key cost savings were realized through lower labour and fertiliser expenses, as well as decreased water costs due to favourable pricing, although water usage increased. The company also absorbed higher lease payments and capital amortization through operational efficiencies.

Improved harvesting techniques, such as innovations in shaking oscillation and strategic replanting efforts, particularly at the Jubilee farm, contributed to maximising yield and quality. However, challenges remain in New South Wales, where four consecutive wet seasons have impacted yields and tree health.

Capital Raise and Strategic Investments

In a significant capital management move, Select Harvests completed an $80 million equity raise (net of transaction costs), which has been instrumental in reducing net debt and gearing ratios. The company repaid $71.3 million in debt and invested $5 million in expanding processing capacity at its Carina West Processing Facility (CWPF), part of the broader Project Optimus initiative aimed at increasing throughput by 10,000MT.

This capital injection not only strengthens the balance sheet but also supports the company’s transformation agenda, focusing on scaling processing operations, enhancing sales velocity, and driving horticultural improvements.

Positive Outlook for FY25

Looking ahead, Select Harvests anticipates a positive FY25, with a forecasted crop size between 27,500 and 29,000MT. The company expects almond prices to rise further to approximately $9.20/kg, buoyed by strong demand from China and other key markets. While weather conditions in New South Wales remain a concern, improved pollination and mitigated frost risks provide some optimism.

Operationally, the company plans to maintain a tight focus on cost control, aiming to keep expenses broadly flat despite ongoing inflationary challenges. The continued rollout of Project Optimus and other transformation initiatives is expected to enhance margins and operational resilience.

Strategic Transformation and Market Position

Select Harvests is progressing well on its strategic priorities, including yield improvement, quality enhancement, and leveraging scale through third-party grower partnerships. The company is also innovating in value-added product lines such as compost and biomass powders, although no mergers or acquisitions are currently planned.

With a strengthened balance sheet, improved cash flow, and a clear execution roadmap, Select Harvests is positioning itself to capitalize on favourable market dynamics and operational efficiencies in the coming years.