RLF AgTech improved margins and cut its quarterly loss sharply, even as revenue fell 18%. The more pressing issue is cash: operating outflow more than doubled to $3.6 million, leaving the fertiliser group with an estimated 1.8 quarters of funding.
- Revenue down 18% to $5.5 million
- Gross margin rises to 32% from 25.7%
- Net loss narrows to $1.1 million
- Operating cash outflow reaches $3.6 million
- RLF China revenue climbs 32% to $1.9 million
Profitability improves while cash position deteriorates
RLF AgTech Ltd (ASX:RLF) has made visible progress on the income statement, but its September quarter exposed a more immediate balance-sheet problem. Revenue fell 18% to $5.5 million, yet gross profit rose 2% to $1.8 million as gross margin expanded to 32% from 25.7%.
The EBITDA loss narrowed to $0.8 million from $1.4 million, while the unaudited net loss after tax more than halved to $1.1 million. Operating expenses fell 20% to $2.6 million, helped by a 57% reduction in corporate costs. That combination suggests the pricing reset and leaner cost base are beginning to affect reported profitability, although RLF remains loss-making.
$3.6 million operating outflow triggers funding disclosure
The cash numbers are less forgiving. RLF used $3.6 million in operating cash during the quarter, compared with $1.7 million in the September 2025 period, leaving $6.4 million in cash at 30 September. The company reported 1.8 quarters of estimated funding under its Appendix 4C, below the two-quarter threshold that requires additional disclosure.
Management attributed much of the gap between the $1.1 million accounting loss and the cash outflow to working capital and liability movements. LiquaForce suppliers tightened credit after late payments during the 2025 season, while trade debtors rose $0.9 million and inventory increased $0.7 million during the cane season. RLF also paid about $0.3 million of previously accrued redundancy, leave and deferred director liabilities.
The quarter included settlement of the $3.9 million capital raise, which had been announced as a placement and convertible note issue. The raise delivered $3.59 million through shares and $0.31 million through convertible notes, before $112,000 of transaction costs. RLF says it expects cash generation to improve in the December quarter as seasonal receivables are collected and more of those collections are retained.
China growth offsets weaker LiquaForce trading
RLF China was the strongest operating unit, with revenue up 32% to $1.9 million, around 50% ahead of budget, and gross margin of 46%. Its EBITDA loss narrowed from $0.4 million to $0.1 million after new customer wins and larger orders from existing accounts. The division won 15 new customers, completed 96 trial reports and held 43 technical meetings across six sales regions.
Australia was more difficult. LiquaForce revenue dropped 34% to $3.4 million as the season started late, growers faced high urea and diesel costs, and softer sugar prices encouraged later or smaller purchases. RLF stopped quoting on an open-book basis during the quarter and began pricing finished products with a raw-material margin, lifting LiquaForce gross margin from 18% to 21%. The Mackay site was also reopened where freight from Ingham had become uneconomic.
December quarter becomes the next cash test
RLF expects the December quarter to be one of its stronger periods for cash generation. The plan is to collect cane-season debtors, close out the LiquaForce season, begin reducing its manufacturing footprint, and launch RLF China's 2027 pre-season prepayment campaign. Australia is also adding three experienced agronomists between late October and mid-November, with cotton demonstration trials under way in southern New South Wales.
That forecast depends on cash conversion improving as promised, not merely on reported margins. RLF says suppliers may restore credit limits after a period of consistent on-time payment and that it will consider further funding alternatives if required. The company has no earnings guidance, so the December cash-flow result and any evidence of restored supplier support will carry more weight than another isolated improvement in quarterly loss.
Bottom Line?
The December quarter must show that better margins can translate into cash before the recently strengthened balance sheet comes under renewed pressure.
Questions in the middle?
- How much of the $3.6 million quarterly outflow reverses when seasonal debtors are collected?
- Will LiquaForce suppliers restore credit limits, and how quickly can the manufacturing footprint be reduced?
- Can RLF China’s prepayment campaign and Australian agronomy hires improve group cash generation without another capital raising?