SunRice FY26 Revenue Falls 2.5% to $1.80 Billion; Profit After Tax Rises 4%

Solid FY26 Earnings Amid Revenue Pressure

Ricegrowers Limited (ASX:SGL), trading as SunRice, posted a solid FY26 financial performance despite a 2.5% dip in revenue to $1.80 billion. The company’s net profit after tax (NPAT) rose 4% to $73.3 million, underpinned by a resilient 8% EBITDA margin, unchanged from FY25.

The earnings strength came despite top-line headwinds including intensified competition in Pacific markets, lower mill out rates for the CY25 Australian rice crop, and foreign exchange pressures. These factors combined to reduce revenue by approximately $75 million year-on-year, offsetting growth in branded markets such as North America and Papua New Guinea, as well as bulk rice and animal feed segments.

Dividend Increase and Capital Management

Reflecting the underlying financial strength, SunRice declared a record fully franked dividend of 70 cents per B Class Share, an 8% increase on FY25. The dividend payout ratio stood at 68%, consistent with the company’s disciplined capital management framework aimed at delivering sustainable shareholder returns.

Net debt was reduced by 31% to $151 million as at 30 April 2026, improving the gearing ratio to 19%, well below the target range of 30–40%. The company’s leverage ratio also improved to 1.1x from 1.5x, providing balance sheet flexibility to support ongoing investment in the 2030 Growth Strategy.

Segment Highlights and Strategic Progress

The International Consumer Packaged Goods segment generated $737 million in revenue, down 7% but with a 1 percentage point increase in EBITDA margin to 11.8%, driven by lower US rice input costs and operational efficiencies. North America saw category share gains through product innovation and expanded distribution.

The Australia and New Zealand Consumer Packaged Goods segment reported flat revenue at $735 million but a 14% decline in EBITDA to $62.6 million, impacted by increased competition and investment in brand building and talent. Notable growth came from the Bakery portfolio and the SavourLife pet food brand.

Bulk Rice and Animal Feed posted a 4% revenue increase to $328 million and a significant 158% jump in EBITDA to $17.9 million, benefiting from improved market conditions and new customer onboarding.

FY27 Outlook Clouded by Smaller Australian Crop

Looking ahead, SunRice expects FY27 revenue to be slightly below FY26, with net profit after tax anticipated to be materially lower. The smaller CY26 Australian rice crop, attributed to drier conditions and reduced water allocations in the Riverina, is expected to cause cost inefficiencies and under absorption in Australian operations.

While underlying revenue growth is forecast across key branded markets, supported by new product launches including Trukai Bakers Flour in Papua New Guinea and SunRice Protein+ Rice in the US and ANZ, these gains are expected to be offset by the smaller crop and adverse currency movements, particularly the sustained appreciation of the Australian dollar against the US dollar.

Profitability is expected to be skewed heavily towards the second half of FY27 as the Group absorbs transitional costs associated with the smaller crop in the first half. Geopolitical instability, especially in Europe and the Middle East, remains a risk factor that could impact trading conditions.

Governance and Structural Review Continue

SunRice’s dual-class share structure, with A Class Shares held by rice growers and B Class Shares publicly traded, remains unchanged. The company continues its strategic review of these Non-Standard Elements, with an update expected in FY27. The Board maintains that any changes to capital structure will require careful consideration and shareholder consultation.

Overall, SunRice’s management emphasises disciplined execution of its 2030 Growth Strategy, focusing on brand innovation, market expansion, and supply chain diversification to navigate cyclical challenges and position for long-term growth.