Inghams Group (ASX:ING) FY26 Net Profit Falls 61.5% Despite Return to Volume Growth

Sonal Goyal

21 August 2026 11:11 AM AEST

Inghams Group (ASX:ING) FY26 Net Profit Falls 61.5% Despite Return to Volume Growth

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Key Highlights

Net profit after tax fell 61.5% to $34.6 million, including a $12.7 million tax provision
Underlying EBITDA pre AASB 16 declined 21.2% to $186.4 million, within guidance of $180.0 million to $200.0 million
Core poultry volumes returned to growth, up 1.9%, with Revenue up 2.4% to $3,227.4 million
Final Dividend cut to 6.1 cents per share, taking full-year dividends down 46.8% to 10.1 cents

Inghams Group Limited (ASX:ING) reported underlying EBITDA pre AASB 16 of $186.4 million for FY26, down 21.2% on the prior corresponding period but within the company's guidance range of $180.0 million to $200.0 million. Underlying EBIT fell 30.0% to $153.6 million, and net profit after tax fell 61.5% to $34.6 million, which the company said reflected lower operating Earnings together with the inclusion of a $12.7 million tax provision.

Return to Volume Growth

The company returned to core poultry volume growth of 1.9% on the prior corresponding period, with growth recorded in both Australia and New Zealand. Net selling prices increased 1.4% to $6.40 per kilogram. Group revenue increased 2.4% to $3,227.4 million, though this was more than offset by a 6.2% increase in total costs, equivalent to $169.9 million, reflecting higher production volumes, cost Inflation and production inefficiencies.

Cost Pressures and Savings

Adjusting for volume growth, total cost growth was 4.1%, reflecting inflationary pressure across packaging, ingredients, cooking oil, freight, labour, and repairs and maintenance. The ongoing Middle East conflict contributed additional costs of $13.2 million during the year. These pressures were partially offset by $82.3 million in cost reduction savings, at the upper end of the company's target, and $27.6 million of lower internal feed costs compared with the prior year.

Australia and New Zealand Performance

Australian revenue increased 3.5% to $2,732.0 million, supported by 2.0% core poultry volume growth and a 2.4% rise in net selling prices to $6.50 per kilogram, with Retail volumes excluding Woolworths increasing 17.2% as the company diversified its customer base. Australian costs increased 8.1%. In New Zealand, core poultry volumes rose 1.5%, with export volumes up 41.9% supported by the reopening of key offshore markets, while local currency revenue grew 2.0%, though this translated to a 3.3% decline in Australian dollar terms due to currency movements.

Balance Sheet and Cash Flow

Cash conversion increased 8.6 percentage points to 105.5%, supported by Working Capital initiatives including reduced processed poultry inventory. Net Debt was reduced by $27.1 million to $403.3 million, although year-end Leverage of 2.2 times underlying EBITDA pre AASB 16 remained above the company's target policy range of 1.0 to 2.0 times. Capital Expenditure for the year was $77.4 million, including automation investments and expanded processing capacity.

Dividend and FY27 Outlook

The Board declared a fully franked final dividend of 6.1 cents per share, representing a 70% Payout Ratio and taking total FY26 dividends to 10.1 cents per share, down 46.8% on the prior year. The company also introduced a Dividend reinvestment plan. For FY27, Inghams is transitioning to underlying EBIT as its primary earnings measure and has guided to underlying EBIT of $155.0 million to $180.0 million, equivalent to underlying EBITDA pre AASB 16 of $190.0 million to $220.0 million, assuming core poultry volume growth of 2.5% to 4.0% and additional costs tied to the Middle East conflict and higher feed input prices.

Conclusion

Inghams Group's FY26 result reflects a year in which cost inflation and production inefficiencies, particularly in the first half, weighed heavily on earnings even as the company returned to volume growth and delivered cost savings at the upper end of its target. Net profit and dividends both declined markedly from the prior year, though the company said operational performance improved materially in the second half, and it enters FY27 guiding to a recovery in underlying earnings alongside a more diversified customer base and reduced leverage as a stated priority.

FAQs

Q: Why did Inghams Group's net profit fall so sharply in FY26?

A: Net profit fell 61.5% to $34.6 million due to lower operating earnings from cost inflation and production inefficiencies, along with the inclusion of a $12.7 million tax provision.

Q: Did Inghams Group return to volume growth in FY26?

A: Yes, core poultry volumes grew 1.9% on the prior year, with growth recorded in both Australia and New Zealand.

Q: How much did Inghams Group save through its cost reduction program?

A: The company delivered $82.3 million in cost savings, at the upper end of its target range.

Q: What dividend did Inghams Group declare for FY26?

A: The Board declared a final fully franked dividend of 6.1 cents per share, taking total FY26 dividends to 10.1 cents per share, down 46.8% on FY25.

Q: What is Inghams Group's earnings guidance for FY27?

A: The company guided to underlying EBIT of $155.0 million to $180.0 million, equivalent to underlying EBITDA pre AASB 16 of $190.0 million to $220.0 million.

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