SunRice Posts $70.7M Profit, Declares 50c Fully Franked Dividend

Financial Performance Overview

Ricegrowers Limited, trading as SunRice, has released its preliminary final report for the financial year ended 30 April 2025, revealing a nuanced performance. While revenue slipped by 1.5% to $1.85 billion, the company managed to lift its profit after tax by 3.7% to $70.7 million. This divergence highlights SunRice’s ability to enhance profitability through operational efficiencies and strategic initiatives despite top-line pressures.

Drivers Behind Revenue and Profit

The revenue decline was tempered by strong volume growth in key markets. Expansion in the Middle East, supported by new product launches and a successful Ramadan campaign, alongside a surge in US export volumes, underpinned sales. Additionally, the international rollout of rice flour products and increased distribution of rice cakes in Australia contributed positively. The acquisition of SavourLife in August 2024 also bolstered growth in the branded pet food category.

However, the company faced headwinds including intensified competition in Pacific and US markets, cost of living pressures affecting consumer spending in Australia, and challenges in the dairy feed sector. Moreover, lower wholegrain mill-out rates from the previous crop constrained product availability in some markets.

Profitability and Cost Management

SunRice’s improved profit margins were driven by a refined product mix, innovation, and cost-saving measures across procurement, logistics, and distribution. Manufacturing efficiencies, particularly in the Rice Foods and CopRice segments, alongside optimized raw material usage, contributed significantly. The company also navigated inflationary pressures and currency fluctuations, such as the depreciation of the Australian dollar and Papua New Guinea kina, through targeted pricing strategies.

Dividend and Shareholder Returns

Reflecting confidence in its financial position, SunRice declared a fully franked final dividend of 50 cents per share, payable on 21 July 2025. This follows interim dividends totaling 30 cents per share earlier in the year. Notably, the company has reactivated its Dividend Reinvestment Plan, suspended since April 2024, offering shareholders an opportunity to increase their holdings.

Outlook and Structural Notes

SunRice maintains its dual-class share structure, with B Class shares publicly traded and entitled to dividends, while A Class shares, held by rice growers, control voting rights. The company’s associates include Pagini Transport in Papua New Guinea and Rice Breeding Australia Limited, focusing on research and transport services. The acquisition of SavourLife marks a strategic diversification into pet food, signaling potential growth avenues beyond traditional rice products.

Investors will be keen to review the forthcoming full Annual Report for a deeper dive into segment performance and risk management strategies, particularly regarding currency and supply chain dynamics.