Highlights

  • Select Harvests Limited reported underlying NPAT of A$29.1 million, up 32.9% year-on-year for HY2026.
  • The company declared a fully franked Interim Dividend of 3.5 cents per share and announced an on-market buyback of up to 10% of Issued Capital.
  • Almond crop guidance improved to 29,500 tonnes, supported by higher external grower volumes and expanded processing capacity.

Select Harvests Limited (ASX:SHV) delivered a marked improvement in underlying profitability for the half-year ended March 2026, supported by higher crop volumes, stable pricing conditions, and improved operational efficiency across its integrated almond Supply chain.

The company reported underlying net profit after tax of A$29.1 million, representing a 32.9% increase compared with the prior corresponding period. Reported NPAT came in at A$26.6 million, while EBITDA reached A$59.0 million. Despite a modest decline in EBITDA year-on-year, Earnings momentum improved on an underlying basis due to stronger Operating Leverage and a changing sales mix.

The market response was positive, with shares trading at A$3.91, up more than 8% on the day, reflecting investor focus on earnings growth and capital management initiatives rather than near-term Revenue Volatility.

Crop Expansion Drives Forward Earnings Visibility

A central feature of the HY2026 result was the expansion in almond production, with the company forecasting a 2026 crop of approximately 29,500 tonnes, within a range of 28,000 to 31,000 tonnes. This represents a material increase compared with the prior year’s 24,903 tonnes.

Management attributed the improvement to enhanced horticultural practices, orchard Maturity, and improved external grower participation. External grower volumes nearly doubled year-on-year to 15,400 tonnes, signalling a structural shift in supply mix toward third-party sourcing.

This shift is strategically significant as Select Harvests continues to scale its processing footprint and position itself as a larger integrated almond processor rather than solely a producer. Processing capacity has increased to 55,000 tonnes, enabling the company to handle rising volumes without proportionate capital expansion.

However, operational performance during the period was impacted by a later-than-usual harvest due to wet weather conditions in key growing regions. This resulted in lower inventory carryover and timing-related Cash Flow effects.

Pricing Stability Supports Revenue Base

Almond pricing remained broadly stable during the period, with an average price of A$10.21 per kilogram compared with A$10.18 in the prior year. This stability provided a consistent revenue foundation despite Volume timing fluctuations.

Global almond market conditions continue to be shaped by supply dynamics in California, which remains the dominant global production region. A lower US crop in 2025 and relatively balanced inventory levels have supported pricing conditions entering 2026.

At the same time, Demand trends remain structurally supportive, driven by long-term consumption growth in plant-based diets, healthy snacking categories, and processed food applications. Select Harvests noted particularly strong demand growth in China and India, while supply chain disruptions have affected access to Middle Eastern markets, prompting a reallocation of exports.

These shifts have contributed to a more diversified customer base, with increasing emphasis on direct commercial relationships rather than Commodity-style bulk sales.

Cost Pressures Offset by Operational Efficiency Gains

Operating performance during the period reflected a combination of efficiency improvements and external cost pressures. The company reported continued progress in processing efficiency, including expanded kernel recovery initiatives, improved drying infrastructure, and enhanced throughput capabilities at its processing facilities.

However, several external factors weighed on cost performance, including inflationary pressures in Australia, weather disruptions, and geopolitical impacts affecting logistics and input costs.

Despite these headwinds, Select Harvests continued to pursue cost optimisation initiatives across orchard management, processing operations, and corporate overheads. Management highlighted that these internal initiatives partially offset external cost Inflation.

Safety performance also improved, with the Total Recordable Injury Frequency Rate declining from 5.5 to 3.7, reflecting ongoing operational discipline across field and processing environments.

Capital Returns Signal Confidence in Earnings Trajectory

One of the more notable elements of the HY2026 announcement was the introduction of Shareholder returns through both dividends and share Buybacks.

The company declared a fully franked interim dividend of 3.5 cents per share, marking a return to interim distributions after a prior period of nil payout. In parallel, the board approved an on-Market Share buyback program of up to 10% of issued capital.

Management stated that the buyback reflects a view that the current share price does not fully reflect underlying Business value and represents an efficient capital allocation mechanism.

From a market perspective, the dual capital return strategy signals increased confidence in cash flow stability and medium-term earnings resilience, particularly as production volumes scale and processing utilisation improves.

Net Debt increased to A$182.6 million during the period, reflecting Investment in crop development and timing impacts from harvest delays. However, the company also expanded its funding capacity to A$300 million through improved facilities and extended tenure.

Strategic Expansion Toward 2030 Scale Targets

Select Harvests has outlined a long-term ambition to expand production capacity to 65,000 tonnes and achieve A$700 million in revenue by 2030. This represents a significant scaling of its current operating base and reflects continued investment in orchard productivity and processing infrastructure.

The strategy is underpinned by three core drivers: expansion of owned crop volumes, increased reliance on external growers, and improved value capture through processing and sales optimisation.

The company has effectively doubled in scale over the past three years, according to management commentary, and is now entering a phase focused on Margin optimisation and capacity utilisation rather than pure expansion.

Conclusion

The HY2026 result from Select Harvests Limited reflects a transition phase in which earnings growth is increasingly driven by scale, processing efficiency, and external supply integration rather than solely by owned orchard output. While headline EBITDA declined modestly, underlying profitability improved significantly, supported by stronger volumes and stable pricing. The introduction of a dividend and a substantial share buyback signals a shift toward more active capital return policies, underpinned by improved earnings visibility. As the company moves toward its 2030 expansion targets, execution across crop scaling, processing efficiency, and global market Diversification will remain central to its financial trajectory.