INGHAMS has reported a net profit after tax down 65 percent to $18.1 million for the half-year ending on December 27.

The company has attributed this result to the impact of cost headwinds primarily in the Australian operations, and conversion of growers to variable performance-based contracts over the last 18 months.

The ASX-listed poultry producer’s underlying earnings before interest, taxes, depreciation and amortisation dropped 35pc to $80.6M.

The results came after a difficult 2025 financial year which saw profits, earnings and processing volumes all decline on the previous year.

Feed revenue from external sales declined due to lower price and volumes, with total revenue coming in at $86.6M for the half, compared to $96.1M in HY25.

The company’s internal feed costs declined further during HY26, by $24.9M, reflecting the sustained improvement in market pricing of key feed inputs over the past 12 months.

Core poultry volumes fell 0.7pc to 232,600 tonnes during HY26, driven by reduced retail volumes.

In Australia, this was primarily due to a 16.1pc drop in Woolworths volumes, offset by strong growth across non-Woolworths Retail of 16.6pc, and Quick Service Restaurants, up 9pc.

There was greater volume decline in the New Zealand market of 1.6pc, mainly due to lower “other poultry product” sales due to the closure of several key export markets during the period.

Total costs increased 5pc or $69.7M from HY25, with key drivers including the management of excess inventory, incremental supply chain and logistics costs, lower farming performance, and transition inefficiencies for Ingleburn in outer Sydney.

In addition, general cost inflation was seen across labour, ingredients and cooking oil, utilities, and packaging costs.

The conversion of 68 growers to variable performance-based contracts over the past 18 months resulted in an increase in operating costs of $29.5M versus HY25, largely offset by lower depreciation and interest charges.

Key capital expenditure during 1H26 included:

• $2.4M upgrade to the Lisarow fully cooked line on the NSW Central Coast;
• $18.8M in automation upgrades across Australian and New Zealand facilities;
• $6.4M to develop new pet food ingredient capabilities; and,
• $1.6M for new growing sheds at Bostock Brothers in New Zealand.

Figure 1: Quarterly spot price data is based on the average of daily market observations is shown for illustrative purposes only. Inghams actual consumption prices will differ due to the purchase of delivered grain/soymeal as well as level of forward cover of 3-9 months. Source: Inghams

‘Disappointing’ results

Inghams chief executive officer and managing director Ed Alexander said the earnings result for the half were “disappointing”.

He said the results were “impacted by cost of managing excess inventory and supply chain transition inefficiencies as the business implemented an operational reset following customer changes experienced in FY25”.

Mr Alexander said Inghams was estimating an underlying EBITDA result for FY26 of $180-$200M, below the previously announced guidance of $215-$230M.

“Given the timing of these impacts, and the pace at which operational efficiency is being restored, we have updated our FY26 guidance to reflect a second half earnings outlook that, while lower than previously expected, still represents a strong uplift over the first half result,” Mr Alexander said.

“Importantly, the fundamentals of the business continue to strengthen.

“Inghams returned to volume growth in the second quarter, prices grew across Australia and New Zealand supported by improved wholesale market fundamentals, and we have reduced inventory which is supporting a return to normalised production settings into the third quarter and improved operating efficiency.

“Measures are in place to restore operational performance and unit costs in the second half, including improved planning, supply chain stabilisation and targeted operational initiatives across farming and processing.

“With improved inventory levels and momentum returning across the core business, earnings are expected to improve through the second half and into FY27.”

Source: Inghams