Shares in Select Harvests Ltd (ASX: SHV) were trending higher on Wednesday after the company announced a solid profit result and predicted demand for almonds to remain strong.
The Australian almond grower reported a net profit of $30.9 million, up from just $900,000 the previous year, while EBITDA was up 81% to $82.4 million.
This was despite the company's almond crop falling by 16% to 24,903 tonnes.
The profit uplift came as a result of an improved almond price, up 32% over the previous corresponding period.
The company said it also achieved a "meaningful reduction in net debt" to $79.1 million, with a debt-to-equity ratio of 15.1%.
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Almond consumption growing
The company said on the outlook, it "continues to hold the view that the macro environment for almonds is positive''.
On the demand side, global trends indicate continued growth in the consumption of healthy foods and snack products, alongside increasing demand for high-quality protein in our key markets. This along with our customer strategy means we continue to see a strong order book. We anticipate world almond demand to continue at a compound annual growth rate of 5% – 7%. On the supply side, our view is that US bearing acres have peaked and we are witnessing a reduction in almond acreage across California.
Managing Director David Surveyour said the company continued to execute against its strategic pillars.
The investment in safety, our people, horticulture, processing and sales has positioned us to leverage the favourable macro-economic conditions. The improvements to our profit, cash and balance sheet reflect the quality of our assets, the operational gains we are making and our commitment to financial discipline. We thank our team and partners for their dedication and our customers for their continued support of the business.
The company said with regards to the current season, the bloom was "generally positive", however, it was not forecasting a crop size at this time.
Our sales and operations teams are well prepared for the coming season. It remains our view there is substantial leverage and growth in our core business. Our focus remains on growing, processing and selling as efficiently as we can.
Select Harvests did not declare a final dividend for FY25, with the company saying the board was balancing the importance of paying down debt against dividend payments, and it would continue to do so.
Select Harvests was valued at $568.4 million at the close of trade on Tuesday. The company's shares were 3.5% higher at $4.14 around noon on Wednesday.
