ASF Group Posts $25.8M Profit on $32.7M Subsidiary Disposal Gain Amid 70% Revenue Drop
ASF Group Limited reports a dramatic turnaround to a $25.8 million profit for FY2025, driven by a one-off $32.7 million gain from subsidiary disposals amid a 70% revenue drop.
- Profit jumps 378% to $25.8 million including $32.7 million non-recurring gain
- Revenue falls 70.3% to $799,724 following completion of major property project
- Debt fully converted to equity, leaving company debt-free
- Significant disposals include ASF Resources and Dawson West coal project
- Ongoing investments in technology and biotech ventures with active R&D
A Sharp Financial Reversal
ASF Group Limited has delivered a striking financial turnaround for the year ended 30 June 2025, posting a net profit of approximately $25.8 million compared to a loss of $9.3 million the previous year. This remarkable swing was largely driven by a substantial one-off gain of $32.7 million from the disposal of subsidiaries, following a strategic debt-to-equity conversion with Star Diamond Developments Limited.
The company’s revenue, however, declined sharply by 70.3% to just under $800,000, reflecting the completion and settlement of the Peninsula Terraces townhouse project, the final stage of its Peninsula Hope Island development. This marks a transition away from property development income towards a more diversified investment and technology focus.
Debt Conversion and Strategic Disposals
In March 2025, ASF Group executed a pivotal Debt to Equity Conversion Deed with Star Diamond, converting a $25 million unsecured convertible loan into full equity ownership of ASF Resources Pty Ltd (ASFR). ASFR holds a controlling interest in Civil & Mining Resources Pty Ltd (CMR), which owns the Dawson West coal project in Queensland. This transaction resulted in ASF losing control of these subsidiaries but crystallised a significant gain on disposal, strengthening the group’s balance sheet and eliminating outstanding debt.
Post-conversion, ASF Group reported no outstanding borrowings and maintained a cash balance of approximately $1.27 million. The company also extended its on-market share buyback program, authorizing the repurchase of up to 79.2 million shares over the next 12 months, signaling confidence in its capital management strategy.
Investment Portfolio and Operational Highlights
ASF Group continues to hold strategic stakes in several ASX-listed associates, including ActivEX Limited (16.97%), Rey Resources Limited (16.39%), and Key Petroleum Limited (9.92%). Notably, the group sold its entire holding in Rey Resources following an off-market takeover bid, realizing proceeds of $0.97 million. It also divested 2.2 million shares in Kaili Resources Limited post-year-end.
On the innovation front, ASF’s technology subsidiary ASFTA is advancing a patented Scotch Yoke engine designed for hybrid and range extender vehicles, boasting emissions compliance without costly add-ons. Meanwhile, its biotechnology investment, BSF Enterprise PLC, has made significant commercial strides with lab-grown leather products and ongoing R&D collaborations targeting diverse markets from fashion to biopharmaceuticals.
Looking Ahead
While the profit surge is encouraging, it is important to note that the bulk of the gain was non-recurring, stemming from asset disposals rather than operational earnings. The company’s ongoing challenge will be to translate its investments in technology and biotech into sustainable revenue streams. The extended share buyback program and recent asset sales suggest a focus on capital efficiency and shareholder value enhancement.
Bottom Line?
ASF Group’s FY2025 profit leap masks a strategic pivot; the market will watch closely for sustainable growth beyond one-off gains.
Questions in the middle?
- Can ASF Group convert its technology and biotech investments into consistent earnings?
- What impact will the extended share buyback have on share price and capital structure?
- How will the loss of control over key subsidiaries affect long-term resource project exposure?
