Ridley Corporation’s half-year results reveal a dramatic profit jump driven by its acquisition of Incitec Pivot Fertilisers Distribution, alongside a healthy dividend increase and solid segment performances.
- Statutory NPAT up 137% to $52.7 million
- EBITDA before significant items rises 9.5% to $55.4 million
- Acquisition of Incitec Pivot Fertilisers Distribution delivers $55.9 million bargain purchase gain
- Interim dividend increased to 5.10 cents per share, fully franked
- Bulk Stockfeeds segment shows strong volume and margin growth; Packaged Feeds faces commodity price headwinds
Strong Half-Year Performance Bolstered by Strategic Acquisition
Ridley Corporation Limited has reported a robust half-year ended 31 December 2025, with statutory net profit after tax (NPAT) soaring 137.4% to $52.7 million. This remarkable uplift was largely driven by a $55.9 million gain on bargain purchase following the acquisition of Incitec Pivot Fertilisers Distribution (IPF) in late September 2025. The acquisition has not only expanded Ridley’s footprint in the fertiliser market but also significantly enhanced its earnings profile.
Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) before individually significant items rose 9.5% to $55.4 million, reflecting operational improvements and the initial contribution from IPF. The fertiliser segment, newly established post-acquisition, contributed $10.3 million in EBITDA during its first quarter of ownership, despite seasonal low demand.
Segment Dynamics: Growth and Challenges
The Bulk Stockfeeds segment delivered a standout performance with a 24.8% increase in EBITDA to $27.1 million. This growth was underpinned by higher volumes across dairy, beef, sheep, and poultry sectors, alongside improved procurement margins and manufacturing efficiencies. These gains highlight Ridley’s ability to capitalise on operational leverage and strategic sourcing.
Conversely, the Packaged Feeds and Ingredients segment faced headwinds, with EBITDA declining 28.5% to $25.6 million. Lower commodity prices for key ingredient recovery products and reduced lamb slaughter rates due to drier conditions weighed on results. Operational disruptions, such as the cooling dam slip at the Maroota facility, further constrained capacity during the period.
Financial Position and Dividend Outlook
Ridley’s balance sheet remains solid despite a net debt increase of $321.2 million, primarily reflecting the IPF acquisition and capital expenditure. The company’s leverage ratio stands at a manageable 0.8 times EBITDA, supported by a strong operating cash flow of $127.9 million, which improved significantly from the prior corresponding period.
Reflecting confidence in ongoing cash generation, the Board declared a fully franked interim dividend of 5.10 cents per share, up from 4.75 cents in the previous year. This marks a clear signal of Ridley’s commitment to delivering shareholder returns amid its growth phase.
Looking Ahead: Growth and Integration
Ridley’s outlook remains positive, with expectations that earnings growth will be driven by a full nine-month contribution from the fertiliser segment, seasonal demand peaks in the second half, and continued volume and efficiency gains in bulk stockfeeds. The company also anticipates modest commodity price recovery and processing improvements in packaged feeds.
The upcoming FY26-28 Growth Plan, to be unveiled at the Investor Strategy Day in March 2026, will provide further clarity on Ridley’s strategic direction and integration progress. Investors will be watching closely for updates on synergy realisation and the finalisation of acquisition accounting, which remains provisional.
Bottom Line?
Ridley’s acquisition-fueled profit surge and dividend hike set the stage for a pivotal year ahead, but integration and market conditions will test its momentum.
Questions in the middle?
- How will Ridley manage integration costs and realise synergies from the IPF acquisition?
- What impact will commodity price fluctuations have on the Packaged Feeds and Ingredients segment in the second half?
- When will the final acquisition accounting and tax treatment for IPF be completed, and what adjustments might result?