SunRice delivers record revenue of $1.88B for FY24

Grain Central June 27, 2024

Harvesting rice in the Riverina of NSW. Photo: Ricegrowers’ Association of Australia

SUNRICE Group has reported record revenue for the financial year ending April 30 of $1.88 billion, up 15 percent on FY23.

Australia’s rice marketer has announced earnings before interest, taxes, depreciation, and amortisation of $143.9 million, a jump of 23pc, and net profit after tax of $68.2M, up 24pc.

SunRice Group chief executive officer Paul Serra said SunRice “delivered yet another strong performance across key metrics” in FY24.

“These exceptional results demonstrate the strength of our brands and our talented team, as well as our operational excellence in navigating a volatile business environment to deliver further growth globally,” Mr Serra said in a statement released to the ASX.

“FY24’s performance was underpinned by the ongoing successful implementation of our Group’s Growth Strategy, the connection between our brands and supply chain, and our discipline and agility in navigating challenging conditions and turning opportunities into advantages.

“Together, these factors supported our international market expansion, with more than half of our group revenue realised outside of Australia in FY24, and approximately 70pc of the group’s sales relating to branded products.”

He said the international market work included expansion of SunRice’s branded product offering in the Middle East, support to grow the European and United Kingdom markets, and the participation in additional government tenders, primarily in Japan.

SunRice CEO and managing director Paul Serra.

Mr Serra said SunRice has also commenced a review of its growth strategy aimed at identifying “new opportunities as we look to evolve and build on our momentum achieved to date”.

“Significant work on this review has already been undertaken, with multiple work streams scoping both domestic and international growth opportunities that are aligned with our core strengths and brands.”

He said this is being completed alongside investments in innovation, diversification and plant breeding.

“We are investing in manufacturing to improve infrastructure; and we are adapting to and anticipating climatic cycles through investment and resourcing in domestic and international farming practices to increase both yield and water productivity to assist with decarbonising rice.”

Paddy price and CY24 forecast

The 2024 (CY24) Riverina harvest was another large crop at approximately 618,000 paddy tonnes.

A number  of factors continue to weigh on anticipated returns.

These include: increased rice supply from Northern  Hemisphere markets returning from drought conditions; the disruption to the global shipping industry, particularly in the Red Sea, and the prevalence of lower quality scores from the CY24 crop to date.

As a result, the CY24 paddy price range remains unchanged at $370-$430/t for medium grain.

With successively large crops in CY23 and CY24, SunRice has full carryover levels and, based on current water availability, expects a further substantial crop in CY25.

Outlook for FY25

The SunRice Group said it will seek to repeat the performance results in FY25.

The company said it was managing significant headwinds, including a softening in sales prices, increasing competition from lower price offerings, unfavourable foreign exchange on imports, and dynamics such as cost pressures in global non medium-grain rice supply, energy and labour.

The group said it will continue to focus on branded product sales.

However, implementing effective pricing strategies and competing with lower price offerings across the group’s business portfolio in FY25 will be  challenging, particularly in markets where consumers are facing increasing cost-of-living pressures,  impacting discretionary spending and driving more trading down to lower-priced products.

The business will remain focused on implementing its sustainability strategy, driving cost and procurement savings, as well as other operational and  manufacturing improvement initiatives in FY25.

Discipline in capital management continues to be exercised to utilise the strong balance sheet to seize further opportunities to consolidate market-leading positions, pursue further innovation and diversify earnings.

Source: SunRice


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