AACo FY25 Profit Climbs 14% as Volume Growth Offsets Price Pressures

Resilient Financial Performance Amid Market Challenges

Australian Agricultural Company Limited (AACo) delivered a robust FY25 result, with operating profit rising 14% to $58.4 million, underpinned by a strategic expansion of its supply chain and increased sales volumes. Total revenue climbed to $387.9 million, reflecting a 5% increase over the prior year, driven primarily by a 21% growth in meat sales volumes and a 38% rise in cattle sales.

Despite downward pressure on prices, particularly in key markets such as Korea and the US, AACo’s disciplined cost management helped soften inflationary impacts. The company maintained a stable herd size while improving productivity, which contributed to higher output without proportionally increasing costs. This operational efficiency was a key factor in the improved cash flow, with net operating cash inflow rising to $27.1 million from $9.3 million in the previous year.

Strategic Brand Initiatives and Market Expansion

AACo’s portfolio of premium brands, including Westholme, Darling Downs, and the recently relaunched 1824, played a pivotal role in driving volume growth. Westholme’s repositioning and targeted marketing campaigns enhanced brand engagement globally, while Darling Downs expanded its footprint in Korea despite competitive pricing pressures. The 1824 brand, celebrating AACo’s 200-year heritage, saw a remarkable 455% increase in sales value in its first full year, signaling strong consumer demand for premium Australian beef.

The company’s global distribution network and in-market partnerships enabled agile responses to shifting regional dynamics, helping to mitigate some of the volatility in pricing and supply. AACo’s focus on nature-led production and provenance continues to resonate with consumers, supporting brand equity and long-term growth prospects.

Sustainability and Asset Investment

FY25 also marked a milestone with AACo’s registration of its first soil carbon project under the Clean Energy Regulator, positioning the company to generate Australian Carbon Credit Units (ACCUs) alongside its beef production. This initiative aligns with AACo’s broader commitment to sustainability and nature-led agriculture, aiming to unlock new revenue streams while enhancing environmental stewardship.

Investment in infrastructure continued, including station facility upgrades, completion of a solar bore program, fleet optimisation, and improved connectivity. These enhancements support operational efficiency and resilience, particularly important as the company navigates global market uncertainties and potential trade policy volatility.

Balance Sheet and Outlook

AACo’s balance sheet remains solid, with pastoral properties growing by 3% to $1.7 billion and net tangible assets per share increasing slightly to $2.55. The company’s gearing ratio stayed within the board’s target range of 20-35%, supported by $600 million in committed borrowing capacity and significant covenant headroom.

Looking ahead, AACo’s refreshed strategy focuses on building a better beef program, unlocking land value, and deepening strategic partnerships. The company is well positioned to benefit from expected contractions in global beef supply, particularly in Korea, Europe, and the US, which may increase demand for Australian product. However, ongoing market volatility and geopolitical risks will require continued agility and prudent management.