Ridley Reports 119.9% Revenue Growth and 36.4% Profit Decline in FY26

Fertilisers Acquisition Drives Revenue Boom

Ridley Corporation Limited (ASX:RIC) reported a near doubling of revenue in FY26, soaring 119.9% to $2.864 billion. This leap was primarily powered by the acquisition of the Incitec Pivot Fertilisers distribution business completed on 30 September 2025, which contributed $1.553 billion in revenue and $72.2 million in EBITDA over nine months. The fertiliser segment’s earnings hit the higher end of expectations, benefiting from geopolitical tensions in the Middle East that boosted global fertiliser prices, despite volume pressures as elevated prices weighed on farm economics.

Ridley’s strategic move into fertilisers has reshaped its portfolio, positioning it as Australia’s leading fertiliser distributor and underpinning a step-change in earnings. The company implemented a regional distribution model early in 2026, delivering cost savings and enhanced customer focus. This expansion also prompted a significant increase in debt facilities, with committed bank debt raised to $350 million and a separate $390 million inventory and trade receivables facility to support the fertiliser working capital cycle.

Profit Falls Sharply on Impairments and Acquisition Costs

Despite the revenue surge, Ridley’s statutory net profit after tax (NPAT) plunged 36.4% to $27.6 million. This decline masks an underlying profit before individually significant items (ISIs) of $61.0 million, a 41.1% increase on the prior year. The gap is largely explained by $33.5 million in after-tax ISIs, including a $31.8 million non-cash impairment related to NovaqPro®, Ridley’s prawn feed technology whose commercialisation has stalled amid uncertain market appetite. The impairment wiped out the asset’s value, with $20.4 million charged against property, plant and equipment, $7.8 million against inventory, and $3.7 million against intangible assets.

Additional ISIs included $34.6 million in acquisition and integration costs for the fertiliser business, restructuring expenses, and an unwind of inventory fair value adjustments. Net finance costs tripled to $32.2 million, reflecting higher debt and lease interest post-acquisition. Corporate costs rose due to expanded employee incentives and operational expenses tied to the enlarged group.

Mixed Segment Performance Highlights Operational Challenges

The Bulk Stockfeeds segment saw modest EBITDA growth of 5.2% to $50.3 million, driven by volume gains in monogastric and ruminant feeds and improved procurement margins, offsetting the absence of the Wasleys feedmill sold in FY25. Packaged Feeds and Ingredients EBITDA fell 17.9% to $51.6 million, hit by capacity constraints at the Maroota rendering plant, commissioning delays at the new OMP Timaru facility in New Zealand, and supply shortages in ovine products. However, dog food contract packing volumes surged 33%, supporting volume growth in packaged products.

Cash Flow Strength and Dividend Increase Signal Confidence

Ridley generated $122.4 million in operating cash flow, up $54.1 million from FY25, bolstered by fertiliser segment cash contributions and disciplined working capital management. Despite a net debt position of $295.9 million at year-end, leverage remains conservative at 0.85 times EBITDA before significant items, within the company’s targeted range.

The Board declared a fully franked final dividend of 5.35 cents per share, up from 5.00 cents last year, bringing full-year dividends to 10.45 cents per share. This reflects Ridley’s commitment to a dividend payout ratio between 50-70% of NPAT and signals confidence in the group’s cash generation and growth prospects.

Outlook Anchored on Integration and Recovery

Looking ahead to FY27, Ridley anticipates earnings growth across all segments, driven by full-year contributions and integration benefits from the fertiliser acquisition, volume expansion and capacity utilisation in Bulk Stockfeeds, and a recovery in Packaged Feeds and Ingredients supported by improved commodity conditions. The company plans to maintain its capital allocation discipline and dividend policy.

While the NovaqPro® impairment underscores risks in commercialising innovative feed solutions, Ridley’s diversified portfolio and strengthened balance sheet provide resilience amid agricultural sector cyclicality and geopolitical uncertainties.

Investors will be watching how Ridley navigates the integration of its fertiliser business and operational challenges in its feed segments, as well as the sustainability of its dividend amid profit volatility.