Highlights

  • Australian Agricultural Projects generated A$806,000 in net operating cash flow on A$1.87m of customer receipts in the September quarter.
  • The company sold its 2026 harvest oil under the Cobram Estate supply agreement, leaving only about 15,000 litres awaiting collection.
  • Management expects an "on year" crop in 2027, with flowering in early November and fruit set in December.
  • The company repaid A$1.70m of borrowings, cut core lending by A$175,000 and held A$282,000 cash at quarter-end.

Almost every litre of the 2026 harvest is already gone. Australian Agricultural Projects (ASX:AAP) has sold its oil, collected the cash and turned its attention to the trees, with buds now pointing to a heavier crop next year. The September quarter delivered A$806,000 of net operating cash flow, and the orchard is moving toward its next big moment in early November.

Quarter at a Glance

The olive grower sells oil under a supply agreement with Cobram Estate Limited. Its quarter to 30 September 2026 brought receipts from customers of A$1.87m, with operating payments matching budget. Cash at quarter-end was A$282,000.

Operating payments included A$651,000 of manufacturing and operating costs, A$192,000 of staff costs, A$114,000 of administration and corporate costs and A$110,000 of interest and finance costs. Investing outflow was A$15,000 on property, plant and equipment. Financing produced a net outflow of A$720,000, made up of A$982,000 of new borrowings and A$1.70m of repayments.

Oil Sales and Pricing

The 2026 harvest oil has been sold and collected, except for about 15,000 litres still waiting to be picked up. Under the Olive Oil Supply Agreement with Cobram Estate, pricing tracks the retail price of packaged Australian extra virgin olive oil in major supermarkets.

Management expects pricing to stay consistent with recent years. It cautioned that competition from imported oil could require more promotional support, which may lower the farmgate price.

Orchard Recovery

Conditions since harvest have been favourable, and the orchard has recovered well. Post-harvest work finished as planned, and greater use of external contractors let pruning wrap up earlier than usual. The focus now is training high-density trees to support future harvests.

Crop and Water Outlook

Bud development is consistent with an "on year" in the biennial cropping cycle, except in parts of the orchard that carried heavy crops last season. Management will review the 2027 harvest outlook after fruit set. That outlook is a company expectation rather than a harvest result.

Despite a strong El Niño, rainfall at the orchard and in its catchments exceeded last year's level, improving major dam storages. Management does not expect problems securing enough water this season and is monitoring storage levels and the irrigation water market.

Debt and Funding

Total financing facilities are A$5.94m, with A$4.95m drawn:

  • A secured NAB bank loan with a A$4.19m limit, A$3.47m drawn, at a variable 7.9% a year, maturing 28 April 2028.
  • A fully drawn A$750,000 unsecured shareholder loan from Patrac Investments Pty Ltd, a party related to a director and shareholder, at 9.60% a year, maturing June 2030.
  • Secured NAB asset finance of A$1.0m, with A$736,700 drawn, at a weighted average of 7.06%, maturing 30 April 2029.

Unused facilities were A$990,000, giving total available funding of A$1.27m. Core lending fell by A$175,000 during the quarter, and similar principal reductions are forecast for the rest of the financial year. Related-party payments totalled A$70,000, covering directors' salary and superannuation, directors' fees and interest paid to Patrac.

Guidance and What to Watch

Management expects positive operating cash flow in the December 2026 and March 2027 quarters, reflecting seasonal oil sale receipts. It also expects a temporary operating deficit in the quarter when most harvest expenses fall. These are management expectations.

The near-term milestones are early-November flowering, December fruit set and the subsequent review of the 2027 harvest outlook. With cash small relative to borrowings, the timing of oil receipts and the price achieved under the Cobram Estate agreement remain central to the cash position.