Sea Forest lifted first-quarter revenue 67% to A$3.4 million and generated a small operating cash inflow as it transitioned to a new distribution arrangement with Teys Australia. The agreement carries an indicative target of 480,000 cattle by June 2027, but the volume is not guaranteed and remains subject to implementation conditions.
- 1Q27 SeaFeed revenue of A$3.4 million, up 67% on 4Q26
- A$0.24 million net cash inflow from operating activities
- A$27.7 million in cash and short-term investments
- Teys Australia distribution agreement targets 480,000 cattle by 30 June 2027
- 131,000 cattle remained under agreement at quarter end
SeaFeed revenue accelerates during distribution transition
Sea Forest Limited (ASX:SEA) has started FY27 with stronger sales momentum and positive operating cash flow, reporting A$3.4 million in first-quarter SeaFeed revenue, up 67% from the previous quarter. The result came as the methane-reduction technology company transitioned towards a new distribution arrangement with Teys Australia.
Customer receipts helped produce a net operating cash inflow of A$0.24 million for the three months to 30 September. That was below the A$0.75 million recorded in 4Q26, although the prior-quarter figure included a one-off A$1.9 million research and development tax incentive refund. At quarter end, 131,000 cattle remained under agreement, with animals being progressively inducted onto SeaFeed supplementation.
Teys agreement sets an indicative 480,000-head target
The commercial centrepiece arrived after quarter end. On 7 October, Sea Forest signed a distribution agreement with Teys Australia, one of the country’s leading beef processors and exporters, with the parties working towards an indicative target of 480,000 cattle supplemented with SeaFeed by 30 June 2027. The agreement builds on the Teys distribution agreement, which earlier coverage reported as potentially expanding SeaFeed’s reach across the Australian and New Zealand beef industries.
Sea Forest said implementation arrangements for the broader rollout were still being agreed collaboratively. The 480,000-head figure is therefore a target rather than disclosed contracted volume, and the announcement does not provide pricing, minimum revenue commitments or guaranteed customer numbers. Management described the arrangement as intended to combine Teys’s distribution reach and customer relationships with Sea Forest’s product and operational expertise.
Cash position remains substantial despite expansion spending
Sea Forest finished September with A$12.6 million in cash, broadly unchanged from the previous quarter. It also held about A$15.11 million in term deposits classified as short-term investments, taking its aggregate cash and investment position to A$27.7 million. The company reported no financing facilities and no borrowings drawn at quarter end.
Quarterly cash use included A$313,000 on property, plant and equipment, A$136,000 on product innovation and intellectual property, and A$50,000 on product registration and approvals. Payments to related parties totalled A$604,000, covering director and executive remuneration, incentives and superannuation.
International approvals remain part of the growth pipeline
Beyond Australia, Sea Forest said discussions with potential customers in South Africa were continuing, while regulatory approval in Brazil was progressing. The company also said it was funded for its strategic objectives, product commercialisation and market expansion activities.
The next test is whether the Teys arrangement converts the indicative target into sustained SeaFeed volumes and customer receipts. The coming quarters should provide a clearer read on cattle induction, sales conversion and whether positive operating cash flow can persist while Sea Forest funds production capacity and market expansion.
Bottom Line?
The Teys target could materially change Sea Forest’s scale, but execution, disclosed commercial terms and cash conversion remain the important tests ahead.
Questions in the middle?
- How quickly will the 480,000-head Teys target translate into actual cattle inducted onto SeaFeed?
- Will the distribution arrangement generate recurring operating cash inflows as rollout costs increase?
- What commercial and regulatory milestones will determine Sea Forest’s expansion in Brazil and South Africa?