Australian Oilseeds Holdings Reports Significant Profit Decline Despite Revenue Growth

Australian Oilseeds Holdings Ltd. reported a significant decline in profitability for the three and nine months ended March 31, 2025, compared to the same periods in the previous year. The company recorded a loss of AUD $630,633 for the three months, a stark contrast to a profit of AUD $41,185 in the prior year. For the nine-month period, the loss deepened to AUD $1,597,298, down from a profit of AUD $2,422,104. Despite these losses, sales revenue increased by 49.8% to AUD $9,430,228 for the three months and by 16.1% to AUD $30,163,944 for the nine months, driven primarily by a surge in retail oil sales and new contracts with major supermarket chains.

The financial performance reflects a notable increase in costs, particularly in the cost of sales, which rose by 55.7% to AUD $8,864,653 for the three months and by 30.8% to AUD $27,562,995 for the nine months. This increase was attributed to higher material costs, particularly for packaging and labor, as the company ramped up production to meet retail demand. General and administrative expenses also saw a significant rise, increasing by 49% for the three months and 35.3% for the nine months, largely due to higher audit and insurance fees.

Operationally, the company has made strategic moves to enhance its market presence, including securing supply contracts with Costco, Woolworths, and Coles supermarkets, which contributed to the increase in retail oil sales. The company also launched four new stock-keeping units (SKUs) aimed at retail consumers, further expanding its product offerings. However, the reliance on a few key customers remains a concern, as the top five customers accounted for a substantial portion of total sales, raising potential risks if any of these relationships were to falter.

As of March 31, 2025, Australian Oilseeds Holdings had cash and cash equivalents of AUD $1,435,123, up from AUD $514,140 at the end of June 2024. However, the company is in a net current liability position of AUD $9,622,311, which raises concerns about its ability to continue as a going concern without securing additional funding. The company has access to a AUD $14 million facility loan from the Commonwealth Bank of Australia, with AUD $8 million remaining available, and is exploring options for additional financing, including a potential US$50 million equity line of credit.

Looking ahead, the company faces challenges in stabilizing its financial performance while navigating increased operational costs and reliance on key customers. The management has indicated that the ability to generate sufficient cash flow from operations will be critical for sustaining business activities and meeting financial obligations in the coming year. The outlook remains cautious, with the company emphasizing the need for strategic financial management to ensure long-term viability.