Atlas Pearls reports FY26 revenue of $25.8M, net loss of $7.9M

Revenue Collapse Amid Quality Setbacks

Atlas Pearls Ltd (ASX:ATP) endured a challenging FY26, reporting a 42% plunge in total revenue to $25.8 million from $44.3 million the previous year. The company swung to a net loss after tax of $7.9 million, compared to a $21.6 million profit in FY25. This sharp downturn was largely attributed to a significant 18% decline in pearl quality, compounded by softer global luxury goods demand and geopolitical uncertainties weighing on customer spending.

Despite harvesting a stable 620,000 pearls, consistent with FY25, the average realised price per pearl dropped nearly 47% to $39.83, reflecting a sales mix skewed towards lower-grade pearls. Pearl sales volumes actually increased 9% to 647,000, but the higher proportion of lower-value pearls diluted overall revenue. The company’s internal Quality Index Score confirmed the quality slump, with scores 18% below the prior year, including disappointing results from the Sumba trial site, which has now been mothballed.

Operational Resilience and Strategic Investments

Amid these headwinds, Atlas Pearls seeded a record number of oysters during FY26, laying a foundation for future production growth. Early FY27 harvests from the Alor and Pungu farms have shown quality improvements of around 20% above recent averages, offering tentative signs that investments in genetics, hatchery programs, and operational excellence are starting to pay off.

The company is actively managing elevated oyster mortality at its North Bali nursery by expanding joint venture nursery partnerships and increasing geographic diversification to mitigate environmental risks. Capacity expansions at key sites such as Alor, Alyui, West Lembata, and Pungu are underway, with the Alyui farm set to more than double annual pearl production to over 400,000 pearls following approval for additional lease blocks and a shift to an 18-month cultivation cycle.

Financial Position and Dividend Declaration

Atlas Pearls closed FY26 with a sound financial position, holding $6.9 million in cash and an undrawn $2.5 million overdraft facility, providing flexibility for working capital and strategic initiatives. Normalised EBITDA remained positive at $5.8 million, down from $18.6 million in FY25.

In line with its dividend policy, the Board declared a fully franked final dividend of 0.45 cents per share, down from 1.4 cents in FY25, reflecting the company’s underlying profitability despite the loss reported.

Sustainability and Risk Management

Atlas Pearls continues to embed sustainability into its operations, with a refreshed framework focusing on environmental stewardship, thriving communities, and responsible business practices. The company reported progress against six key sustainability KPIs, including emissions intensity reduction, waste diversion, gender pay equity, community health initiatives, education support, and local procurement.

Key risks remain environmental and biosecurity challenges affecting oyster health, market demand fluctuations, and regulatory compliance in Indonesia. The company’s risk management framework includes geographic diversification, environmental monitoring, and strong stakeholder engagement to mitigate these exposures.

Executive Remuneration and Governance

Executive remuneration is aligned with company performance and shareholder value creation, featuring short-term incentives tied to EBITDA and individual KPIs, alongside long-term incentives through performance rights plans. CEO Michael Ricci received a total remuneration package of $585,748 for FY26, including performance-based bonuses.

The Board maintained full attendance at meetings, with José Martins continuing as Independent Non-Executive Chairman and Michael Ricci as CEO, steering the company through a demanding year.