Highlights

  • Rivco Australia (ASX:RIV) reported half-year net profit after tax of A$2.1 million, with profit before tax of A$3.0 million.
  • About 80% of the water portfolio is leased for the new water year, with committed lease revenue of A$10.6 million.
  • An interim dividend of 1.8 cents per share, fully franked, is payable on 30 October 2026.
  • Pre-tax net asset value was A$1.76 per share at 30 June 2026, with gearing at 12%.

Rivco Australia Ltd owns and manages a portfolio of water entitlements in the Murray-Darling Basin and leases them to irrigators, giving growers access to water without the capital outlay of ownership. Recent reporting covers its half-year result, leasing for the new water year and a revised approach to dividends.

Company Business

Rivco Australia (ASX:RIV) has operated for around a decade and holds about 61.3 GL of water entitlements across 18 entitlement types and zones, valued at A$309 million at 30 June 2026. The portfolio is weighted to high security water, at 80%, with 17% general security and 3% groundwater. The Murray region accounts for 76% of value and the Murrumbidgee 13%.

Income comes mainly from long-term leases to farmers growing permanent plantings, annual crops and mixed farming enterprises, together with sales of temporary water allocations. Internalising management is expected to reduce the operating cost base by about A$1.0 million a year.

Recent Development

In late August 2026, Rivco Australia (ASX:RIV) released its half-year report for the six months to 30 June 2026 alongside an interim dividend announcement. The company reported 80% of its portfolio leased from 1 July 2026, with a weighted average lease expiry of 3.5 years and an effective yield of about 4.3% on leases.

Alongside the interim dividend of 1.8 cents per share, fully franked, the board outlined a revised framework effective from 1 January 2027. Dividends will be paid semi-annually in April and October, with a core component of 60% to 100% of adjusted net profit after tax and a discretionary component of 0% to 100% of after-tax capital gains. The company also restarted its on-market share repurchase in May 2026, acquiring 1.1 million shares at an average price of A$1.42.

The August monthly report showed pre-tax net asset value of A$1.73 per share, down 4 cents on the month, as Southern Basin entitlement values softened.

Financial Performance and Sector Context

For the half-year, Rivco Australia (ASX:RIV) recorded profit before tax of A$3.0 million, compared with A$35.3 million in the prior corresponding period, which included realised gains on entitlement sales of A$34.3 million. Net profit after tax was A$2.1 million against A$24.5 million, and earnings per share were 1.3 cents against 15.8 cents. Lease revenue was A$3.0 million, compared with A$2.9 million, while water allocation sales were A$2.8 million, compared with A$6.0 million.

Pre-tax net asset value was A$1.76 per share and post-tax A$1.60 per share at 30 June 2026. Drawn debt was A$38.0 million, a loan-to-valuation ratio of 12% against a maximum covenant of 40%, with an effective borrowing cost of 5.7%. Committed lease revenue for the 2026/27 water year is about A$10.6 million.

Water conditions are a central sector factor. Southern Basin storages were 47% at 30 June 2026, but winter rainfall lifted the weighted average to 64% by the end of August. The company notes that greater water availability typically places downward pressure on spot prices, a risk partly offset by its leased share of the portfolio.

Risks to Consider

Water entitlement values and allocation prices depend on rainfall, storage levels, crop demand and government policy, including the pace of environmental water recovery. Improved storages can reduce spot-market income and lower entitlement values, as reflected in the August net asset value movement. Unleased water, about 20% of the portfolio, is exposed to these conditions.

Balance sheet considerations include borrowings of A$38.0 million, interest rate exposure, where a 25 basis point change affects annual interest by about A$95,000, and covenant limits on gearing. Earnings can also vary between periods because realised gains on entitlement sales are not recurring.

What to Watch Next

Near-term dates include payment of the interim dividend on 30 October 2026, following the record date of 16 October. Rivco Australia (ASX:RIV) also publishes monthly updates and quarterly reports, which show net asset value, leasing levels, dam storages and allocation outcomes. The revised dividend framework takes effect from 1 January 2027, with payments in April and October.

Key Insights

Rivco Australia (ASX:RIV) reported a lower half-year profit than the prior corresponding period, which had included large realised gains, while lifting the leased share of its portfolio to 80% and committing about A$10.6 million of lease revenue. Water availability, entitlement values, interest costs and the operation of the new dividend framework are the main factors to monitor in later reports.