TasFoods reports a $3.6 million net loss for H1 2025, impacted by oversupply and discounted poultry prices, while advancing key initiatives including pet treats expansion and planned divestments.
- Consolidated operating EBITDA loss of $1.5 million, up 51% from prior year
- Statutory NPAT loss of $3.6 million including $1.2 million non-cash impairment
- 12% decline in poultry sales volume due to oversupply and market discounting
- Expansion of Isle & Sky Pet Treats via new distribution agreement
- Planned divestment of Pyengana Dairy and Burnie property in H2 2025
Challenging Market Conditions
TasFoods Ltd has reported a difficult first half of 2025, with a consolidated operating EBITDA loss widening to $1.5 million, a 51% increase compared to the same period last year. The statutory net loss after tax stood at $3.6 million, which includes a $1.2 million non-cash impairment related to Nichols Poultry assets. This financial performance reflects the ongoing pressures from an unprecedented oversupply of poultry in both Tasmanian and mainland Australian markets, coupled with heavily discounted wholesale pricing.
Strategic Initiatives Amidst Headwinds
In response to these challenges, TasFoods has undertaken several key initiatives to streamline operations and strengthen its market position. Notably, the company converted its chicken contract growers to lease agreements, securing greater control over its poultry supply chain and improving operational efficiencies. The Isle & Sky Pet Treats brand continued its rollout, marked by a significant sales and distribution agreement with Natures Best, one of Australia's largest integrated pet retail and distribution businesses. This move leverages poultry waste streams to diversify revenue sources.
Cost Management and Asset Divestments
Cost reduction efforts have been a priority, with corporate overheads cut by $0.6 million and a leaner corporate office focusing on essential services. The company also optimized its feed supply, transitioning from Inghams to Ridley, achieving a roughly 6% improvement in feed conversion ratio, which has contributed to operational efficiencies. Strategically, TasFoods plans to divest its Pyengana Dairy business by the end of October 2025 and has agreed to an unconditional sale of the Burnie property, with settlement expected mid-September 2025. These divestments align with the company’s capital management framework aimed at enhancing shareholder returns.
Financial and Operational Outlook
Despite these efforts, TasFoods’ cash position was negative $1.3 million at the end of June 2025, reflecting the combined impact of market oversupply, increased competition, and rising input costs such as electricity, gas, and labor. The company anticipates that competitive pressures and challenging trading conditions will persist through the remainder of 2025 and into early 2026. Management remains focused on strengthening the poultry supply chain, optimizing processing solutions through technology, expanding the pet treats segment, and further reducing overhead costs to build a more resilient and sustainable business model.
Looking Ahead
TasFoods’ path forward is marked by cautious optimism. The company is actively reviewing its asset portfolio and operational strategies to adapt to evolving market dynamics. The success of its divestment plans and the growth trajectory of its pet treats division will be critical indicators of its ability to navigate the current headwinds and restore profitability.
Bottom Line?
TasFoods faces a tough road ahead but is betting on strategic divestments and pet treats growth to stabilize its future.
Questions in the middle?
- How will the divestment of Pyengana Dairy impact TasFoods’ overall financial health?
- Can the pet treats expansion offset ongoing losses in the poultry segment?
- What timeline does TasFoods foresee for market recovery and improved poultry pricing?