NPAT fell 43% but pro-forma EBITDA rose to $13.5m on biological-asset swing

EBITDA fell 32.4% to $12.5m, PBT fell 38.3% to $9.2m and NPAT fell 43.4% to $6.0m (HY24 $10.6m).

The headline gap is driven by non-cash accounting on biological assets and inventory: a $3.6m loss this period versus a $4.1m gain last period, a $7.7m swing. Stripping that out, the company's preferred pro-forma EBITDA measure actually rose to $13.5m from $10.7m.

Operating cash inflow rose 37.7% to $16.2m, capex tripled to $5.2m and the cash balance ended at $28.3m against $3.1m of borrowings, leaving the group in a net-cash position broadly unchanged from HY24. No interim dividend was declared.

Pro-forma EBITDA — the metric the company guides to — rose roughly 26% to $13.5m on higher volumes and revenue, while GAAP EBITDA fell because biological-asset and inventory revaluations flipped from a $4.1m gain to a $3.6m loss. The cleaner operating read is the pro-forma figure; the GAAP decline does not by itself indicate a deterioration in trading performance.

Inventory and capex are absorbing cash even as headline OCF looks strong. Inventories rose 32.6% to $35.6m, lifting inventory days to 63.6 from 53.3 (+10.3 days), and capex jumped 231% to $5.2m (5.1% of revenue versus 1.7%). This is consistent with a stocking and reinvestment phase rather than a steady-state harvest.

Guidance was narrowed downward at the top end. FY25 pro-forma EBITDA guidance moved to $26m–$30m from the original $26m–$32m. The floor is unchanged, but the upside case has been removed, which matters because FY24 pro-forma EBITDA was $24.5m — so the new range still implies modest growth, but less of it than originally signalled.

With HY25 GAAP EBITDA at $12.5m and FY25 pro-forma guidance at $26m–$30m, the implied second-half pro-forma EBITDA is roughly $12.5m–$16.5m, against $13.8m delivered in 2H24 on a pro-forma basis. That makes 2H25 a meaningful test: delivery to the midpoint requires a result around or slightly above the prior 2H, after a 1H that was already running well ahead.

The narrower guidance band reduces the size of the upside surprise available, so the focus shifts to whether harvest, pricing and biological performance can hold the inventory build that has accumulated through 1H.

Trade debtors rose 16% (+1.2 receivable days) and inventory days rose 10.3 days, so the working-capital cycle is lengthening, not tightening. FCF pre-lease of $11.0m, only marginally above $10.2m last period, is a more durable read on cash generation than the headline OCF.

Capex at 5.1% of revenue (versus 1.7%) is a real call on cash and a step-change in investment intensity. The combination of inventory build, higher debtor days and tripled capex means the cash position held flat rather than building, despite revenue growth and improved underlying trading. ROE of 3.1% (versus 6.1%) reflects both lower NPAT and a larger equity base. Overall, the underlying trading improvement is genuine, but headline cash and conversion ratios flatter the result.

This briefing cannot assess salmon harvest biology, pricing trajectories, or the supportability of the pro-forma adjustments without management's segment and cost detail.