Why Sea Forest (ASX:SEA) sees a Teys Australia deal as the route to scale for its methane-cutting seaweed feed

Sonal Goyal

04 November 2026 10:12 PM AEDT

Why Sea Forest (ASX:SEA) sees a Teys Australia deal as the route to scale for its methane-cutting seaweed feed

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Key Highlights

• Sea Forest signed an agreement with Teys Australia on 7 October 2026.

• Its SeaFeed product is designed to cut methane from cattle.

• The company is classified in Consumer Staples.

• Scale and financial base are the main issues to weigh.

Sea Forest (ASX:SEA) sees its 7 October 2026 agreement with Teys Australia as the route from a promising niche product to a national one. The Tasmanian company makes SeaFeed, a methane-cutting cattle supplement derived from red seaweed, and the deal gives one of Australia's large beef processors exclusive distribution rights, subject to purchase targets.

What Sea Forest sells

Sea Forest (ASX:SEA) is classified by the ASX in the Consumer Staples sector, within food, beverage and tobacco. It describes itself as an agri-tech business, based at Triabunna in Tasmania, supplying products that reduce methane in agriculture and improve livestock productivity.

SeaFeed is based on compounds found in Asparagopsis, a red seaweed native to Australian coastal waters. The company listed on the ASX on 26 November 2025.

The Teys agreement

Under the agreement, Sea Forest (ASX:SEA) and Teys will use reasonable endeavours to reach at least 480,000 head of cattle on feed with SeaFeed by 30 June 2027. That is a joint ambition rather than a firm commitment.

The company says the total under agreement would rise from 131,000 head to 541,000, including about 70,000 head already on feed. The initial term runs to 30 August 2030, but Teys may terminate without cause on 90 days' notice.

Teys becomes exclusive distributor for the beef industry in Australia and New Zealand, provided it meets Volume targets. Prices are to be agreed within commercially viable parameters, and the announcement discloses no payment amounts.

The financial base

In preliminary, unaudited results for the year to 30 June 2026, SeaFeed Revenue was A$4.98 million, against A$0.85 million a year earlier. Underlying EBITDA improved to a loss of A$3.09 million from A$6.21 million, and the statutory loss narrowed to A$5.42 million from A$9.09 million.

Raw materials, consumables and production costs were A$2.20 million, so revenue exceeded those direct costs by about A$2.78 million on our arithmetic. Operating expenses rose 39 per cent to A$4.06 million, or 17 per cent excluding non-recurring listing costs.

Operating cash outflow was A$4.64 million, helped by a A$1.86 million Research and Development tax incentive refund. Cash and term deposits stood at A$27.76 million, of which A$12.64 million was cash and A$15.11 million term deposits. Net Assets were A$39.75 million. The audited Annual Report was released on 28 September 2026, and readers should check it for any changes to these figures.

The September 2026 quarter showed momentum. SeaFeed revenue was A$3.4 million, 67 per cent above the June quarter, customer receipts were A$3.449 million, and Operating Cash Flow was positive at A$242,000. The group held A$27.7 million in cash and term deposits at 30 September 2026.

Risks to weigh

The cattle under agreement are being inducted progressively. The Teys target is indicative, and the 131,000 head under agreement was unchanged over the September quarter, so conversion from agreements to cattle fed is the figure to follow. Teys can also walk away at short notice, and use of SeaFeed at its own feedlots is subject to agreement on price and product availability.

Sea Forest (ASX:SEA) remains loss-making. Scaling seaweed production and distribution requires Capital and operational delivery, and Demand partly depends on carbon-market and regulatory settings that the company does not control.

What comes next

The company said in its results material that carbon trading is expected to become a revenue stream from the third quarter of FY27, although the September Quarterly Report did not restate a timetable. Regulatory approval in Brazil is progressing, and discussions with potential customers in South Africa are continuing, with the company citing EU and UK approvals as ambitions.

The next dated checkpoints are the 2026 annual general meeting, for which notice was issued on 26 October 2026, and the quarterly update for the December 2026 quarter.

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