Key Highlights

  • SeaFeed receipts were A$3.4 million, up 67 per cent on the June quarter, with 131,000 head of cattle under agreement, unchanged from the prior quarter.
  • A distribution agreement with Teys Australia was signed on 7 October 2026, with an indicative target of 480,000 head by 30 June 2027.
  • Cash and term deposits totalled A$27.7 million with no debt, and working capital spending exceeded its use-of-funds allocation.

Sea Forest Limited (ASX:SEA) reported in its 1Q27 quarterly update that receipts from its SeaFeed product were A$3.4 million in the quarter ended 30 September 2026, up 67 per cent on the June quarter. The company also said it signed a distribution agreement with Teys Australia on 7 October 2026 and had cash and term deposits totalling A$27.7 million.

Sales and cattle under agreement

Cattle under agreement were 131,000 head, unchanged from the prior quarter, with cattle being progressively inducted onto SeaFeed. Management said the transition to new distribution arrangements affected sales adoption during the quarter. The update did not report production volumes or carbon credit sales; the only carbon-related item was A$88,000 of cumulative spending on its Voluntary Carbon Project.

Cash flow and balance sheet

Net operating cash inflow was A$0.24 million, compared with A$0.75 million in the June quarter, which had included a one-off A$1.9 million research and development tax incentive refund. Investing outflow was A$0.25 million, mainly A$0.31 million of property, plant and equipment payments, partly offset by asset disposal proceeds and loan repayments. Financing outflow was A$61,000, all lease liability payments.

Cash and cash equivalents were A$12.6 million, the same as at the end of the June quarter. In addition, the company holds term deposits of about A$15.11 million with maturities of six to nine months, bringing its aggregate position to A$27.7 million. Sea Forest has no debt and no undrawn facilities. Related-party payments of A$0.6 million covered director and executive remuneration.

Use of funds against plan

The company also compared actual spending with the allocations in its use-of-funds statement for the period from 1 July 2025 to 30 September 2026. Working capital and overheads have used A$11.76 million against an allocation of A$9.28 million, a shortfall in the allocation of about A$2.48 million, which Sea Forest said has been helped by customer receipts of A$7.3 million. Capital expenditure has used A$0.97 million of a A$17.6 million allocation, indicating that most of the planned capital programme remains to be spent.

Teys agreement and international prospects

The distribution agreement with Teys Australia was signed on 7 October 2026. The parties are working towards an indicative target of 480,000 head of cattle by 30 June 2027. The company described the target as indicative and collaborative, and it is subject to the conditions of the agreement. That compares with the 131,000 head currently under agreement, so reaching the target would require substantial growth in adoption.

Outside Australia, discussions with potential customers in South Africa are continuing, and regulatory approval in Brazil is progressing. The update did not give dates for either market or any revenue expectation.

What to watch

The milestones the company points to are the progress of the Teys relationship towards the 480,000 head indicative target by 30 June 2027, continued induction of cattle onto SeaFeed, and regulatory and customer developments in Brazil and South Africa. The company's balance sheet, with no debt, funds operations while those relationships develop, though it has overspent its working capital allocation in the use-of-funds statement.