Strong Performance Driven by Global Expansion and Strategic Implementation
SunRice Group, Australia’s leading rice marketer, has announced record revenue of $1.88 billion for the financial year ending April 30, marking a 15 percent increase over FY23. The company also reported significant growth in earnings before interest, taxes, depreciation, and amortisation (EBITDA) to $143.9 million, a 23 percent rise, and a net profit after tax of $68.2 million, up 24 percent.
Paul Serra, SunRice Group’s Chief Executive Officer, attributed these outstanding results to the company’s strategic initiatives and the resilience of its operations amid a volatile business environment. “These exceptional results demonstrate the strength of our brands and our talented team, as well as our operational excellence in navigating a volatile business environment to deliver further growth globally,” Mr. Serra stated in a press release to the Australian Securities Exchange (ASX).
Key Drivers of Success
Mr. Serra highlighted several factors underpinning SunRice’s FY24 performance, including the ongoing implementation of the Group’s Growth Strategy and the strong connection between the company’s brands and supply chain. He noted that more than half of SunRice’s revenue in FY24 came from international markets, with approximately 70 percent of sales attributed to branded products.
The international market expansion was particularly successful in the Middle East, Europe, and the United Kingdom, supported by increased participation in government tenders, notably in Japan.
Strategic Review and Future Investments
SunRice has commenced a comprehensive review of its growth strategy to identify new opportunities for further expansion. This review is being conducted alongside significant investments in innovation, diversification, and plant breeding. “We are investing in manufacturing to improve infrastructure; and we are adapting to and anticipating climatic cycles through investment and resourcing in domestic and international farming practices to increase both yield and water productivity to assist with decarbonising rice,” Mr. Serra explained.
Paddy Price and Crop Forecast
The 2024 Riverina harvest yielded approximately 618,000 paddy tonnes, maintaining a large crop size. Despite this, several factors, such as increased rice supply from recovering Northern Hemisphere markets and disruptions in global shipping, are influencing the anticipated returns. Consequently, the CY24 paddy price range remains at $370-$430 per tonne for medium grain. SunRice anticipates another substantial crop in CY25, contingent on current water availability.
FY25 Outlook
Looking ahead, SunRice aims to replicate its FY24 performance despite facing significant challenges, including softening sales prices, increased competition from lower-priced offerings, and unfavorable foreign exchange rates on imports. The company also plans to address cost pressures in non-medium-grain rice supply, energy, and labor.
SunRice will focus on maintaining its branded product sales and implementing effective pricing strategies to compete in markets affected by rising cost-of-living pressures. The company will continue to drive cost savings, operational improvements, and sustainability initiatives. Discipline in capital management will be essential to leverage its strong balance sheet for market consolidation, innovation, and earnings diversification.
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