Highlights

  • HY26 sales Revenue was A$1.77 billion and underlying EBIT reached A$76.6 million.
  • Delta Agribusiness contributed A$45.8 million of gross Margin and A$10.4 million of EBIT over five months.
  • Net Debt excluding leases was A$621.6 million, with Leverage at 3.8 times against a target below 2.0 times.
  • Operating cash flow rose to A$67.0 million, while management expects working-capital release to support second-half debt reduction.
  • Weather, Commodity prices, input costs and execution of Delta synergies remain central variables for the full-year outcome.

Elders Limited (ASX:ELD) is an Australian rural services company supplying farm inputs, livestock and wool marketing, real estate and financial services. HY26 reflected a larger operating base following the addition of Delta Agribusiness, with higher revenue and underlying EBIT but leverage above management's preferred range. The second half therefore centres on converting scale into cash generation and lower debt.

HY26 Earnings and Business Mix

For the six months to 31 March 2026, Elders reported sales revenue of A$1,767.7 million and underlying EBIT of A$76.6 million. Reported net profit after tax was A$39.5 million, while underlying net profit after tax was A$37.9 million. The Interim Dividend was maintained at 18.0 cents per share, fully franked. Return on Capital was 10.7%, and the gross margin percentage was 22.4%.

The rural services division remained the largest earnings contributor, with segment EBIT of A$71.9 million. Elders Real Estate contributed A$24.1 million, Elders Crop Protection A$22.3 million, Delta Agribusiness A$10.4 million and AIRR A$7.5 million, partly offset by corporate costs of A$59.4 million.

Delta Agribusiness Integration

Delta contributed five months of operations to HY26, generating A$45.8 million of gross margin and A$10.4 million of EBIT. Management has indicated that Delta earnings are weighted toward the second half and has targeted A$8 million of FY26 synergies across procurement, animal health, crop protection and financial services. These benefits remain targets, so delivery through the remainder of the year will be important when assessing the integration.

The enlarged group also carries a different margin profile. A wholesale-oriented business can generate lower percentage margins than advice-led retail operations, so margin percentage should be read alongside gross margin dollars and segment mix.

Debt Reduction and Cash Flow

Balance-sheet repair is a central focus. Net debt excluding Lease liabilities was A$621.6 million, with leverage at 3.8 times versus management's target below 2.0 times. Operating Cash Flow rose to A$67.0 million, while working-capital release after the winter cropping peak could support second-half cash flow.

The planned Killara Feedlot disposal is another part of the debt-reduction pathway, although the supplied material did not establish completion. The full-year accounts will provide the clearer measure of proceeds and final debt.

Seasonal and Operating Variables

Elders remains sensitive to rainfall, livestock and grain prices, input availability and International Trade conditions. Fuel, fertiliser and crop-protection costs can also affect customer spending and purchase timing.

Key Insights

Elders enters the second half of FY26 with a larger revenue base, but the outcome depends on how quickly that scale converts into cash and lower leverage. Delta's contribution, targeted synergies, working-capital movements and asset disposals will shape the balance-sheet trajectory, while weather and input conditions remain external variables.