Australian Oilseeds 2025 Q3 Earnings Net Income Plummets 1631.2%

Australian Oilseeds (COOT) reported its fiscal 2025 Q3 earnings on May 30th, 2025. The company experienced a significant decline in net income, posting a net loss of A$0.6 million compared to a net income of A$41 thousand in the previous year. Despite this, the company achieved a 49.8% revenue increase, reaching A$9.4 million. This was mainly driven by strong retail oil sales, which surged 69.4% due to expanded distribution and new product offerings. Australian Oilseeds anticipates significant growth and improving returns over the long term, although potential risks remain.

Revenue

Australian Oilseeds achieved a 49.8% surge in total revenue, reaching A$9.43 million in Q3 2025, up from A$6.30 million in Q3 2024. Retail oils emerged as the strongest segment, contributing A$4.75 million, while wholesale oils and high protein meals each generated A$2.30 million. Meanwhile, other sales and toll crushing services added A$27,678 and A$58,011, respectively, to the company's revenue.

Earnings/Net Income

Australian Oilseeds maintained its EPS at A$-0.03 in Q3 2025, consistent with Q3 2024. The company reported a net loss of A$630,633, a significant downturn from the previous year's net income of A$41,185. This performance reflects a challenging earnings period for the company.

Price Action

The stock price of Australian Oilseeds has climbed 6.49% during the latest trading day, has jumped 10.02% during the most recent full trading week, and has climbed 5.10% month-to-date.

Post Earnings Price Action Review

The strategy of purchasing Australian Oilseeds (COOT) shares following a revenue increase in the financial report and holding them for 30 days has yielded mixed results over the past three years. On May 30, 2022, the announcement of a 49.8% rise in Q3 fiscal 2025 sales revenue likely prompted an initial stock price increase. However, the reported net loss of A$0.6 million for the quarter may have introduced some volatility as investors reacted to the negative earnings surprise. The strategic debt-to-equity conversion of A$5 million, announced simultaneously, could have been perceived positively, potentially stabilizing or even elevating the stock price due to perceived long-term benefits. By June 30, 2022, the market might have responded to the conversion, followed by further price appreciation if the revenue growth was deemed sustainable. This strategy would have been repeated for 2023 and 2024, with the market's reaction to each new revenue raise influencing the stock's performance. Ultimately, while the revenue increase initially appeared promising, the 30-day holding period exposed investors to market fluctuations and the risk of a net loss. The debt-to-equity conversion could have mitigated risks, but overall performance depended on market assessments of the company's growth potential and cost management.

CEO Commentary

"We were pleased to deliver strong year-over-year growth in the third quarter, led by our retail category where our expanded distribution network and broader product lineup drove results," said Gary Seaton, Chief Executive Officer. He noted robust demand across customers and channels, affirming the company's commitment to premium quality. However, the company reported a net loss of A$0.6 million, attributed to changes in sales mix, planned investments in branding and marketing, and rising professional fees, insurance, and employee costs. The CEO expressed confidence in the company's long-term growth potential and commitment to eliminating chemicals from the edible oil production process.

Guidance

The company’s forward-looking statements indicate a belief in significant growth and improving returns over the long term. The CEO emphasized the commitment to expanding brand investment and marketing efforts, as well as maintaining a focus on premium product quality. The company anticipates ongoing robust demand across various customer channels, which is expected to drive further growth. However, they acknowledge potential risks, including global economic conditions that could impact future demand and challenges in sustaining the level of growth experienced previously.

Additional News

Australian Oilseeds Holdings Limited has made significant strides in strengthening its financial position through a strategic debt-to-equity conversion valued at A$5 million. This move, announced on May 30, 2025, involved the conversion of an outstanding loan into 4,452,479 ordinary shares, enhancing the company’s balance sheet by reducing its debt obligations and increasing shareholders' equity. This conversion reflects management's commitment to optimizing the capital structure and bolstering financial flexibility, despite resulting in the dilution of existing shareholders' stakes. The company's focus remains on the sustainable production and distribution of chemical-free edible oils, aligning with its long-term business strategies and financial goals.