Select Harvests (SHV) Investor Update summary

Strategic and Operational Update

• Executing a disciplined growth strategy targeting a 15% yield increase and expanding Carina West processing capacity from 40,000 to 50,000 tons by 2026, supported by a $5m capex program.

• Record 2024 almond crop of 29,500 tons/MT, with 79–80% contracted for sale and sales velocity up to 36,600 tons, driven by strong demand and rising prices.

• 2024 crop price expected at AUD 7.70–7.75/kg, with strong forward pricing for 2025, supported by low global inventories and robust demand, especially in China and India.

• Horticulture strategy review identified AUD 10 million upside through yield, quality, and cost initiatives, with external almond supply up fivefold to 10,500 tons.

• Processing and sales strategies focus on margin optimization, direct supply to large customers, and value-added product flexibility, including almond milk supply to APAC.

Financial and Capital Structure Update

• Announced a fully underwritten AUD 80 million capital raise via $30m placement and $50m entitlement offer at $3.80/share, a 15.6% discount to last close, to strengthen the balance sheet and support growth.

• Majority of proceeds ($71.6m–$72m) allocated to debt reduction, $5m to Carina West expansion, targeting pro forma net debt of AUD 100–110m and gearing of 20–35%.

• FY24 EBIT forecast at AUD 17–19m, NPAT at AUD 2.5–4m, slightly below consensus due to inventory write-off, delayed shipping ($56m in cash delayed), and higher interest costs.

• Delayed cash is expected to be fully received by December 2024; logistics issues are being addressed with process improvements and new service providers.

• No major capex or acquisitions planned beyond Carina West; focus remains on organic growth and prudent debt levels.

Market and Trading Outlook

• Global almond market dynamics are favorable, with low inventories, rising prices, and strong demand from China and India.

• Value-added product strategy is flexible, optimizing between kernel and value-add based on market conditions; almond milk supply to APAC is growing.

• Cost base for FY25 expected to remain flat in absolute terms, with potential for lower unit costs if crop volumes increase.

• No significant quality issues in the 2024 crop; residual crop quality has returned to long-term averages.

• Early signs for 2025 crop are positive, with healthy trees and no varroa mite impact, though some patchy pollination in nonpareil variety.