NZK swung to $10.6m profit and lifted EBITDA guidance to $23.5-27.5m

Revenue rose 14.4% to $91.6m on a 4.8% lift in sales volumes (2,885MT to 3,024MT), with the balance reflecting price and mix.

PBT grew 163.3% to $14.9m and NPAT grew 143.4% to $10.6m, with the gap explained by an effective tax rate that normalised to 28.6% from the prior period's –4.2% (when losses produced limited tax benefit). Management also lifted pro-forma EBITDA guidance to $23.5m–$27.5m, from the $21m–$25m range issued in March.

The balance sheet strengthened materially: cash rose to $28.7m, gross borrowings fell to $3.5m, and net cash sits at $25.2m. Equity climbed 23.4% to $174.2m.

Reported EBITDA of $18.5m compares with pro-forma EBITDA of $10.7m disclosed by management, and the company also notes a rolling 12-month pro-forma EBITDA of $21m. Reported earnings are running roughly $7.8m above the measure management uses to guide the market, which means the headline NPAT of $10.6m overstates the underlying half-on-half run-rate. The pro-forma adjustments (described in the appendix) sit between reported earnings and guidance.

Guidance revision is a real upgrade, but only partial. The new $23.5m–$27.5m pro-forma range implies a second-half pro-forma EBITDA of roughly $13m–$17m on the disclosed $10.7m first-half base. This is consistent with the historical second-half-weighted pattern (HY23 contributed –153.8% of FY23 EBITDA because of the mortality event), so the upgrade is best read as confirmation that the new farming model is performing, not as evidence of a structural step-change.

Capital position has moved from constrained to optionality. Net cash of $25.2m, gross borrowings down 31.9%, and capex cut to $1.6m (1.7% of revenue, versus 5.7% prior) leave the company funded but signalling restraint. No interim dividend was declared, which is consistent with retaining capital while the recovery is bedded in.

The first-half pro-forma EBITDA of $10.7m sits at roughly 39%–46% of the new guidance range, which is plausible given the disclosed second-half harvest weighting.

The result does not give a clean read on what a normalised full-year baseline looks like beyond FY24, because both prior-period comparisons are distorted (HY23 by the mortality event, FY23 by the response to it). The rolling 12-month pro-forma EBITDA of $21m is the most useful run-rate marker disclosed.

Operating cash flow of $11.8m converted at 63.7% of reported EBITDA, well below the typical full-conversion benchmark, but free cash flow pre-lease of $10.2m covered 95.9% of NPAT once capex (cut sharply) is accounted for. Inventory days fell from 66.5 to 53.3, releasing biological-asset working capital and supporting cash even as the business grew; receivable days were essentially flat at 26.9. The capex cut from $4.6m to $1.6m flatters near-term FCF and is unlikely to be sustainable indefinitely for a farming operation.

The bigger durability question is the reported-versus-pro-forma EBITDA wedge. With $7.8m of items management chooses to exclude from the figure it guides on, the underlying earnings power of the half is closer to the $10.7m pro-forma base than the $18.5m reported figure. ROE of 6.1% (computed on reported earnings) likewise overstates underlying returns relative to the pro-forma view.

This briefing cannot assess the appendix-level pro-forma adjustments, biomass health, or pricing trajectory beyond the disclosures provided.