Ridley is expecting its investment into Novacq, an aquafeed additive cultivated in pods, to break even by the end of the financial year.

AUSTRALIAN-OWNED stockfeed miller, Ridley Corporation, has announced a net profit after tax of $22.6 million in its 1H22 results released today.

This is up 124 per cent on the previous corresponding period.

The company reported earnings before interest, taxes, depreciation, and amortisation (EBITDA) and before individually significant items of $39.1M for the period ending December 31, 2021.

This is up about 21pc on last year.

Growth for bulk, packaged feeds

Bulk stockfeeds performed the strongest for Ridley, contributing $18.6M to the EBITDA, a 28pc increase on the previous corresponding period.

This performance is due to the volume growth in all species, with significant gains in the poultry and dairy sectors and the benefits from procurement strategies in the transition from old-crop to new-crop grain.

Ridley CEO Quinton Hildebrand

Ridley CEO Quinton Hildebrand said the introduction of the new Ridley Direct service about six months ago has been a win for business by broadening its access to the market.

“We are on track to deliver the target which is to supply ingredients totaling about 5pc of the bulk stockfeeds weekly volume by FY23,” he said.

Packaged feeds and ingredients also saw growth contributed EBITDA of $27.1M, an 18pc rise.

In this area, the rendering business delivered strong results due to higher selling prices for protein meals and tallows, yield improvements and product premiumisation following the recent capital upgrades.

Mr Hildebrand said the urban petfood market was one source of this added growth.

“Our expansion into the new pet ranges also has good traction.”

“During this half we experience double digit growth…as well as we have also been successful in winning second house-brand contract which will commence in the second half.”

Thailand plant triples production

Aquafeed business continued to underperform due to surplus capacity in the sector and transitioned to a single site operation in 1H22.

Although key initiative Novacq reported a loss, Mr Hildebrand is optimistic about the future of the product with the Thailand plant tripling production and now running on a commercial scale.

He said this has prompted the company to decision to close the pilot plant in Yamba in northern New South Wales.

“That will be finalised in the coming months.

“The Yamba pilot plant has now served its purpose and the learnings have now been deployed to Thailand.”

Mr Hildebrand said it is expected that Novacq will break even by the end of the year.

Outlook subject to COVID-19, inflation

Mr Hildebrand said 2H22 earnings are “expected to improve” thanks to the momentum from the current business strategy, however this will depend on the impact of external factors on the business.

“The outlook is subject to the ongoing impact of COVID-19 and the related inflationary pressures,” he said.

“However, the business has taken proactive steps to reduce the potential impacts from these risks.”

Source: Ridley