Australian Agricultural Projects Reports 752,600 Litres of Premium Olive Oil in 2025 Harvest
Australian Agricultural Projects Ltd has completed its 2025 harvest with a record 752,600 litres of high-quality extra virgin olive oil, setting the stage for improved cash flows and strategic restructuring.
- Record 2025 olive oil harvest of 752,600 litres completed
- Over 95% of oil classified as high extra virgin quality
- June quarter operating cash deficit of $1.14 million due to harvest costs
- Lease renewals vary between two projects, prompting asset sales and operational review
- Focus on debt reduction, orchard upgrades, and investment scheme simplification
Record Harvest and Quality Gains
Australian Agricultural Projects Ltd (ASX, AAP) has reported the completion of its annual olive oil harvest for 2025, producing a record 752,600 litres of oil. This volume marks a significant increase from the 551,500 litres harvested in 2024 and aligns with the company’s biennial production cycle. Despite a frost event last September that impacted overall output, the harvest volume is comparable to the previous "on-year" in 2023.
Quality testing revealed that over 95% of this season’s oil meets the high extra virgin standard, a notable improvement over recent years where a larger proportion was classified as virgin oil. This quality enhancement supports the company’s premium positioning in the Australian olive oil market.
Financial Performance and Cash Flow Dynamics
The June quarter saw an operating cash deficit of $1.14 million, a result consistent with the company’s seasonal cash flow pattern. This deficit reflects the timing of harvest-related expenses and limited receipts from the prior season’s sales during the quarter. Management anticipates a return to positive operating cash flows in the September quarter as proceeds from the 2025 harvest sales are realised.
During the quarter, the company redrew $1.34 million from existing borrowings, partially offsetting repayments and maintaining liquidity. Total cash and unused financing facilities at quarter-end provide a buffer to support ongoing operations and strategic initiatives.
Strategic Focus and Lease Renewal Outcomes
Post-harvest, Australian Agricultural Projects is prioritising debt reduction, orchard equipment upgrades, and the simplification of its managed investment schemes. The company’s balance sheet is expected to strengthen as replanted orchards mature and generate surplus working capital.
A significant development during the quarter was the expiration of the first term of grower leases underpinning the company’s projects. While all growers in the second project opted to renew their leases for 25 years, none in the first project chose to extend. This divergence has prompted plans to manage asset sales from the first project and reassess the operational structure of the second, reflecting a strategic pivot in asset management and project focus.
Outlook
With record production volumes, improved oil quality, and strong retail prices underpinning revenue expectations, Australian Agricultural Projects is positioned for enhanced cash flow generation over the next twelve months. The company’s disciplined approach to debt management and operational restructuring aims to deliver sustainable shareholder returns while navigating the evolving landscape of its managed projects.
Bottom Line?
AAP’s record harvest and strategic recalibration set a promising yet cautious tone for its financial recovery and growth trajectory.
Questions in the middle?
- How will the asset sales from the first project impact the company’s financial position?
- What operational changes will be implemented following the lease renewal outcomes?
- Can the company sustain improved cash flows amid market price fluctuations for extra virgin olive oil?
