Announcement PDF Appendix 4D: Half-Year Report Ricegrowers Limited (ASX – SGLLV) ABN: 55 007 481 156 Financial Half-Year Ended: 31 October 2024 Lodgement Date: 19 December 2024 Lodged with the ASX under Listing Rule 4.2A. This information should be read in conjunction with the Annual Report for the year ended 30 April 2024 and any public announcements made by Ricegrowers Limited (“SunRice” or “Group”) since the start of the current financial year, in accordance with the continuous disclosure requirements of the Listing Rules of the Australian Securities Exchange. About SunRice’s structure The structure of Ricegrowers Limited (SunRice) contains non-standard elements, including its dual class share structure comprising A Class Shares and B Class Shares. A Class Shares confer on their holders the right to vote at general meetings but no right to dividends. A Class Shares are not quoted on ASX and may only be held by rice growers who meet the production quotas prescribed by the SunRice constitution. No person may hold more than 5 A Class Shares. In practical terms the voting rights held by A Class Shareholders give those shareholders the right to control the election of directors and any changes to SunRice’s constitution. B Class Shares are quoted on ASX and confer on their holders the right to receive dividends, as determined by the directors from time to time. Holders of B Class Shares do not generally have the right to vote at general meetings of SunRice. This means B Class Shareholders have no right to vote on the election of directors of SunRice. No person may hold more than 10% of the total number of B Class Shares on issue. For more details of the non-standard elements of SunRice’s structure see investors.sunrice.com.au. Reporting Period and Reported Information The current reporting period is the half-year ended 31 October 2024 (1H FY25) and the previous corresponding reporting period is the half-year ended 31 October 2023 (1H FY24). Results for Announcement to the Market $000 Revenue from ordinary activities Down 0.7% TO 912,468 Profit after tax Up 4.5% TO 31,925 Profit after tax attributable to B Class shareholders Up 4.3% TO 31,253 Current period Previous corresponding period Net tangible assets backing per B Class Share ($) 7.72 7.61 Basic earnings per B Class Share (cents) 47.2 46.9 Diluted earnings per B Class Share (cents) 46.6 45.8 Amount per security (cents per B Class Share) 15.0 15.0 Franked amount per security (100% franking rate applicable) (cents per B Class Share) 15.0 15.0 Interim dividend Date the dividend is payable Record date to determine entitlements to the dividend 24 January 2025 27 December 2024 Ricegrowers Limited’s Dividend Reinvestment Plan (DRP) is currently suspended. SUNRICE APPENDIX 4D 1H FY25 / 1 APPENDIX 4D: HALF-YEAR REPORT Commentary on Results for The Period Details of the results of the Group for the period ended 31 October 2024 are included in the attached Interim Financial Report. The Group’s performance in the first half of FY25 was driven by a range of different dynamics. Notably: • Profit margin growth was achieved in the Rice Food, Riviana Foods and CopRice segments and was supported by improved product mix, the realisation of manufacturing and logistics efficiencies and cost control initiatives, which all contributed to an increase in Group EBITDA and NPAT compared to 1H FY24. • Volumes grew in some markets and product categories, including Rice Cakes, Rice Flour and Toscano’s bakery goods. The ample supply of US rice also enabled substantial growth in US export volumes. However, it contributed to lower pricing in some markets, particularly global tender markets. The Group also faced challenges including cost of living pressures impacting the Food Service sector and consumer spending patterns in Australia, as well as the contraction of the ruminant sector in Australia and New Zealand. Combined, these pricing and demand challenges resulted in the slight drop in Group revenue compared with the prior corresponding period. • The Group acquired SavourLife during the period, bolstering its participation in branded high growth, higher margin companion animal categories. The Group also acquired the Simply Delish business in 1H FY25, which is expected to enable Riviana Foods to expand its presence in the chilled channel through its own vertically integrated supply chain. As in prior years, the first half results are not expected to reflect the proportional full year results of the Group, because the second half of the year is generally more positively influenced by seasonal factors and consumption habits during festive periods. Details of associates The SunRice Group has the following associates: Name of associate Pagini Transport (incorporated in Papua New Guinea). Principal activity: Transport Rice Breeding Australia Limited (incorporated in Australia). Principal activity: Research into the delivery of new and improved rice varieties Reporting entity percentage holding Pagini Transport: 30.44% (31 October 2023: 30.44%) Rice Breeding Australia Limited: 33.33% (31 October 2023: 33.33%) Controlled Entities On 30 August 2024, Ricegrowers Limited acquired 100 per cent of the share capital in SavourLife Pty Ltd and SavourLife IP Pry Ltd. There have been no other changes in controlled entities in the six months period to 31 October 2024. Other Information Required Please refer to the attached Interim Financial Report and the 2024 Annual Report for other information required. SUNRICE APPENDIX 4D 1H FY25 / 2 Interim Financial Report For The Half Year Ended 31 October 2024 Ricegrowers Limited & Controlled Entities ABN 55 007 481 156 Contents Directors’ Report 2 Auditor’s Independence Declaration 7 Consolidated Interim Financial Report Consolidated Income Statement Consolidated Statement of Comprehensive Income Consolidated Balance Sheet Consolidated Statement of Changes in Equity Consolidated Cash Flow Statement Notes to the Consolidated Financial Statements Directors’ Declaration 8 8 9 10 11 12 13 24 Independent Auditor’s Review Report 25 This interim financial report covers the consolidated entity consisting of Ricegrowers Limited and its controlled entities. The interim financial report is presented in Australian dollars. Ricegrowers Limited is a company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is: Ricegrowers Limited 57 Yanco Avenue LEETON NSW 2705 Its shares are listed on the Australian Securities Exchange (code SGL/SGLLV). SUNRICE INTERIM FINANCIAL REPORT 2025 4 DIRECTORS’ REPORT Your Directors present their report on the consolidated entity consisting of Ricegrowers Limited and the entities it controlled at the end of, or during the half year ended 31 October 2024. 1. Directors The following persons were Directors of Ricegrowers Limited during the financial period and up to the date of this report: LJ Arthur (Chairman) P Serra (Chief Executive Officer) JMJ Bradford (Deputy Chairman) L Catanzaro AJ Crane M De Bortoli ID Glasson IR Mason JL Zanatta Other key pockets of growth across the Group included the Papua New Guinea (PNG) rice market where we grew market share; our Flour business, which expanded its customer base; the Rice Cakes business, which benefited from expanded ranging and distribution in Australian retail channels; and the consistent performance of our Toscano brand in the bakery category. Sales into the branded pet food channel in Australia, particularly in dog food (supported by the Group’s acquisition of SavourLife in August 2024), also contributed to growth during the period. All of these positive developments were built on the strength of the Group’s brands and the quality and breadth of our product portfolio. 3. Review of operations Other areas of our business were however under pressure during 1H FY25 which partly offset these gains. This included operational and in-market macro-economic challenges in some of our Middle East and Pacific markets; increased competition in some US distribution channels; cost of living pressures impacting the Food Service sector and consumer spending patterns in Australia; and the contracting equine and dairy feed sectors in both Australia and New Zealand. The SunRice Group overview Pricing and foreign exchange pressures The SunRice Group had a positive 1H FY25, largely delivering in line with expectations. The Group reported revenue of $912 million, compared to $919 million in the prior corresponding period (1H FY24); Earnings Before Interest, Tax, Depreciation, Amortisation and Impairment (EBITDA) of $67.9 million and Net Profit After Tax (NPAT) of $31.9 million, up 7% and 5% respectively on 1H FY24. Ample rice supply in the Northen Hemisphere also significantly impacted pricing and competition in some markets, resulting in price deflation and the slight downturn in overall Group revenue. This was particularly relevant in some US distribution channels and in global tender markets (both out of the Rice Pool business and the US), where tender prices were particularly high at the start of FY24 and progressively fell by as much as two thirds in some cases at the beginning of FY25. 2. Company Secretary K Cooper While some of the headwinds previously foreshadowed impacted the Group during 1H FY25, our active management of these challenges and focus on leveraging the Group’s brands while realising new opportunities, led to the improvement of profit margins and a solid set of results for the period. Accordingly, the Group was pleased to revise the CY24 Paddy Price range for our Riverina rice growers from $370 - $430 to $380 - $420 per tonne for medium grain rice, and to declare an interim dividend of 15 cents per B Class Share. Total Shareholder Return 1 (TSR) for 1H FY25 was 48.2%, compared to the ASX300 Accumulation Index TSR of 17.2%. Pleasingly, following the increased liquidity in our B Class Shares over recent years and particularly during 1H FY25, SunRice was selected for inclusion in the S&P/ASX Agribusiness Index (XAG) by S&P Dow Jones. The index tracks the performance of leading and emerging ASX-listed agribusiness companies. Our performance drivers in a strategic and global context From a top line perspective, whilst broadly consistent with the prior corresponding period, 1H FY25 was impacted by a number of conflicting dynamics. Volume opportunities and challenges The return of ample rice supply in the Northern Hemisphere underpinned substantial growth in United States (US) export volumes compared to 1H FY24. 1 Investment period COB 30 April to COB 31 October 2024, TSR considers movement in B Class Share price and dividends paid, and assumed all dividends are reinvested on the dividend payment date. Revenues generated by our Trukai business in PNG were also impacted during the period by the depreciation of the PNG Kina (PGK) against the AUD, which negatively affected the AUD conversion of Trukai’s PGK denominated revenue in the Group’s consolidated results. The Group continued to implement appropriate pricing strategies where possible to help partially absorb inflationary headwinds including the higher global rice prices resulting from India’s export ban on non-Basmati rice varieties, and the ongoing sharp depreciation of the PGK against USD denominated rice imports in PNG. Profitability Despite the challenges impacting revenue and profitability in some of our core international rice markets, the Group improved overall profitability in 1H FY25, primarily through improved mix, cost savings programs and profit margin growth in our complementary businesses, including Riviana Foods, CopRice and Rice Food. This growth was fuelled by a range of factors, such as manufacturing efficiencies, raw material usage optimisation, reduced logistics and distribution costs and the successful implementation of other cost controlling initiatives, including direct procurement savings. Further details are available in the following segment overview. SUNRICE INTERIM FINANCIAL REPORT 2025 2 DIRECTORS’ REPORT Segment performance drivers Australian Rice Pool Business Rice Pool REVENUE ($000’)s Strong Riverina rice supply, with a CY24 harvest of 618,000 paddy tonnes, together with refreshed packaging for SunRice’s core rice range, a reshaped promotional and marketing approach and our ability to leverage opportunities in the UK following the ratification of the UK Free Trade Agreement in 2023, underpinned strong branded and traded sales across key domestic and international markets in 1H FY25. This performance was further supported by the weak AUD favouring USD denominated rice exports during the period. 1H FY25 1H FY24 183,024 195,482 Volume growth however slowed in parts of the Middle East due to some operational challenges associated with a change in one of our distribution partners as well as the local geopolitical situation, and the flow-on impact it had on the credit worthiness of some of our customers, requiring careful management and delaying some of our product shipments. EBITDA ($000’)s 1H FY25 - 1H FY24 - Global tender prices continued to fall over the last 12 to 18 months to more historical levels in line with the available global supply. This had a significant impact on the Rice Pool and primarily drove the downturn in revenue compared to 1H FY24. -6% NPBT ($000’)s 1H FY25 - 1H FY24 - In addition to these top line dynamics, paddy returns continue to be impacted by a range of other factors in FY25. Favourable factors include the lower asset financing charges delivered to the Corporate segment (in line with a slightly lower cost of capital and a reduced average net asset position) and the drier CY24 crop, which is requiring less energy intensive aeration than the CY23 crop. However, the impact of the variable seasonal conditions on the CY24 crop is resulting in significantly lower average milling yields. The related effects on throughput and milling rates, along with the ongoing impacts of tensions in the Red Sea on shipping costs and lead times, represent major challenges that are expected to impact the CY24 paddy price as discussed in ‘Our outlook’. Profit Businesses International Rice REVENUE ($000’)s Overall volumes grew in the International Rice segment in 1H FY25 due to ample Northern Hemisphere rice supply underpinning a significant increase in US export volumes, and brand strategy delivering market share gains in PNG. 1H FY25 418,801 The return of Northern Hemisphere volumes however also contributed to the significant fall in global tender and export pricing, which almost fully offset the volume effect on the top line. Increased rice production also drove competition on both volume and price in US distribution channels as well as a competitive landscape in delivering higher returns to local US growers, both of which further impacted our profitability in these markets. The ongoing high cost of internationally sourced rice, largely driven by the Indian ban on non-Basmati rice exports (which was recently lifted), also continued to place pressure on margins in key Pacific markets. In PNG, this was compounded by the ongoing sharp devaluation of the PGK against USD denominated rice imports. These FX pressures had a double effect on the reported numbers, as the concurrent depreciation of the PGK against the AUD also negatively impacted the translation of Trukai’s results into the consolidated Group results. While the Group continued to review its pricing strategies in these markets to help partially absorb inflationary impacts, price sensitivity remains a risk, with low-cost operators supplying increasing volumes of cheaper, lower quality rice. Pleasingly though, our brand strength continues to build momentum in some of our larger Pacific markets, notably PNG. Similar to the Rice Pool, geopolitical tensions in parts of the Middle East also slowed growth opportunities in this segment, particularly our expansion into diverse rice categories. 1H FY24 420,947 -1% EBITDA ($000’)s 1H FY25 24,996 1H FY24 26,430 -5% NPBT ($000’)s 1H FY25 18,465 1H FY24 19,629 -6% Rice Food REVENUE ($000’)s Through the additional ranging and distribution of Rice Cakes products in Australian retail channels, new export opportunities for the Flour business, new product launches (such as flavoured microwave rice cups and protein chips) and increased investment in brand building, our Rice Food segment was able to grow volumes in 1H FY25, despite the ongoing pressures from lower priced offerings, particularly in the Microwave Rice category. 1H FY25 1H FY24 65,521 58,792 Trade spend efficiencies and the effect on the current period of pricing strategies implemented in the prior year to help partially absorb inflationary impacts, further supported the segment’s revenue gains compared to 1H FY24 and contributed to improved profit margins. EBITDA ($000’)s 1H FY25 7,746 1H FY24 4,578 These profit margins were further supported by the realisation of manufacturing efficiencies across most production lines and more optimal raw material sourcing and utilisation mix in flour production. Initiatives to optimise the product portfolio also played a key part in driving improved profitability in this segment. +11% +69% NPBT ($000’)s 1H FY25 6,954 1H FY24 3,397 +105% SUNRICE INTERIM FINANCIAL REPORT 2025 3 DIRECTORS’ REPORT Riviana Foods REVENUE ($000’)s On a similar basis to FY24, Riviana Foods’ top line performance in 1H FY25 continued to be fuelled by the growth of the Toscano brand in the bakery category, with volumes up approximately ~20% on 1H FY24. Similar growth rates were also achieved in the Hart & Soul portfolio of products, on the back of a successful soup season. 1H FY25 117,297 1H FY24 111,190 Operational changes in our logistics network and savings in distribution costs further supported the improvement in profit margins across the business, despite challenges with the availability of raw materials for some of our manufactured products. Riviana Foods’ performance was however impacted by competition from lower priced offerings in the premium biscuits and pickled vegetables categories, which hampered the performance of our Always Fresh brand. High cost of living pressures in Australia continued to impact volumes in the Food Service sector, although a favourable change in product mix during the period neutralised the effect of this volume loss on the top line. A rationalisation review of Riviana Foods’ overall product portfolio in 1H FY25 is expected to be beneficial for longer term profitability, despite impacting the topline in the current period. +5% EBITDA ($000’)s 1H FY25 3,581 1H FY24 1,811 +98% NPBT ($000’)s 1H FY25 1,731 1H FY24 774 +124% In May 2024, Riviana Foods acquired a branded and third-party manufacturer, Simply Delish, to add to its portfolio. Simply Delish (which manufactures some of our Roza’s Gourmet chilled products), is expected to enable Riviana Foods to expand its presence in this channel through its own vertically integrated supply chain. CopRice REVENUE ($000’)s CopRice’s performance in 1H FY25 continued to be supported by its companion animal division, which delivered revenue growth against the prior corresponding period, driven by growth in both branded and contractmanufacturing businesses. Growth in the CopRice dogfood and cat litter branded range was driven by commercial initiatives to expand distribution and seek consumer preferences in store. 1H FY25 126,028 1H FY24 129,452 The Group completed the acquisition of the premium petfood business SavourLife in August 2024, further bolstering our participation in high growth, higher margin branded categories. SavourLife is a highly differentiated purpose driven brand, with a social mission to save and rehome abandoned rescue dogs; a proposition that resonates with consumers and gives us an exciting platform to help drive growth into the future. The acquisition remains on track to be earnings per share accretive for the Group in the first full financial year of ownership. Trading conditions were more difficult in the equine feed and ruminant stockfeed businesses, driving the overall decline in the segment’s revenue compared to the prior corresponding period. Equine feed sales were negatively impacted by cost-of-living pressures in Australia, particularly in the leisure segment where horse owners have relied more on abundant pasture and increasingly down-traded to cheaper feed alternatives. Ruminant stockfeed sales in both Australia and New Zealand were negatively impacted by the availability of pasture and cost pressures on dairy farmers. -3% EBITDA ($000’)s 1H FY25 11,899 1H FY24 7,909 +50% NPBT ($000’)s 1H FY25 8,652 1H FY24 4,684 +85% Despite challenges in our revenue trajectory, CopRice remained able to lift its profit margins during 1H FY25 through numerous actions, including a favourable mix shift towards branded companion animal products; effective management and savings in direct procurement; and operational efficiencies and cost controls at our mills, manufacturing sites and in our transport network. Corporate REVENUE ($000’)s The Corporate segment’s 1H FY25 performance was directly impacted by lower asset financing charges received from the Australian Rice Pool Business, due to a lower average net asset base in that business and a slightly reduced cost of capital (the basis on which the charges are calculated), compared to the prior corresponding period. 1H FY25 - 1H FY24 - EBITDA ($000’)s 1H FY25 19,661 1H FY24 22,546 At EBITDA level, this shortfall was magnified by $1.1 million of property sales in the prior comparative period. This was however largely offset at NPBT level by lower debt financing charges in 1H FY25, in line with lower average debt levels as the Group was able to direct strong cash generative earnings to repay a portion of its drawn debt facilities. -13% NPBT ($000’)s 1H FY25 8,629 1H FY24 11,172 -23% SUNRICE INTERIM FINANCIAL REPORT 2025 4 DIRECTORS’ REPORT Other operating income and expenses Other notable changes in the Group’s consolidated income statement for 1H FY25 include: • A decrease in energy costs, as a result of the lower aeration required for the CY24 crop, which was harvested during dry conditions. This contrasts with the higher aeration required in the prior year for the CY23 crop, which was harvested during wet conditions; • An increase in employee benefits expenses, primarily driven by increased activity in the Riverina following the receipt of a larger CY24 crop of 618,000 Paddy tonnes (CY23 crop: 500,000 Paddy tonnes); as well as increased activity in the US as larger volumes of rice became available post drought; and an increase in new employees joining the Group following the acquisitions of Simply Delish and SavourLife in 1H FY25; and • An increase in contracted services, primarily associated with the work undertaken as part of the implementation of the Group’s 2030 Growth Strategy. Effective tax rate The Group’s effective tax rate for 1H FY25 was 28%, compared with 23% for 1H FY24. This rate continues to reflect the blended nature of the Group’s local and international operations and was influenced by a change in the contribution of each of those various operations to Group profitability. Our Net Working Capital movement has been largely driven by reduced stock holdings in our Trukai subsidiary as they progressively return to more historical levels following a period of significant shipping disruption; and a general improvement in the timing of cash collection across the Group. The Group’s leverage ratio 5 and Return on Capital Employed 6 (ROCE) were 1.4x and 13.5% as at 31 October 2024 respectively, compared to 1.6x and 12.7% as at 30 April 2024. The improvement in these metrics also aligns with the strong EBITDA generated during 1H FY25 and the reduction in Net Debt. As at 31 October 2024, all remaining debt drawn down on our Seasonal facility related to Net Working Capital funding, with this Net Working Capital being primarily made up of near term marketable inventory for our captured markets. Notably, no amounts were drawn down on the Group’s Core facility as at 31 October 2024, as the acquisitions of Simply Delish and SavourLife were both funded from existing cash reserves. Other notable changes in the Group’s consolidated balance sheet as at 31 October 2024 include: • Corresponding decreases in inventories and amounts payable to Riverina rice growers, which align with the business’s seasonality, whereby these balances peak at harvest time around April each year; and • An increase in intangible assets relating to brands and goodwill added as part of the Simply Delish and SavourLife acquisitions. Operating, investing and financing cash flows Banking facilities and covenants The Group continued to exercise financial discipline during 1H FY25 and to proactively manage its net working capital requirements. Core and seasonal debt facilities remained unchanged during 1H FY25, however the Group was able to use its strong cash generative earnings to reduce average debt levels, in turn generating savings in finance costs compared to 1H FY24. Operating cash inflows of $96.4 million in 1H FY25 (1H FY24: $81.9 million) were largely driven by the strong EBITDA generated during the period and a reduction in the net working capital balance compared with 30 April 2024 (see ‘Balance sheet items’ for further details). Investing cash outflows in 1H FY25 were $37.4 million (1H FY24: $8.5 million) and were largely driven by a combination of capital expenditure to maintain core assets; strategic capital expenditure to upgrade our Leeton, NSW manufacturing operations (see ‘Capital management’ for further details); and the amounts paid by Riviana Foods and CopRice to respectively acquire Simply Delish and SavourLife during the period. Financing cash outflows were $49.4 million in 1H FY25 compared to $105.1 million in 1H FY2024. The lower amount in the current period is primarily due to the larger investing cash outflows during 1H FY25. Balance sheet items Net Debt 2 of $202.1 million and gearing 3 of 25% as at 31 October 2024 both decreased from $223.8 million and 27% respectively as at 30 April 2024. This improvement reflects the strong EBITDA generated during 1H FY25 and the decrease in Net Working Capital 4 from $465.7 million as at 30 April 2024 to $415.8 million as at 31 October 2024. 2 Net Debt equals current plus non-current borrowings less cash and cash equivalents. 3 Gearing equals net debt divided by net debt plus equity. 4 Net Working Capital equals receivables plus inventories less current payables less amounts payable to Riverina rice growers less current tax liabilities (net of current tax receivables) less current provisions. The Group maintains sufficient headroom to meet the covenants on its existing borrowings, and sufficient working capital and undrawn financing facilities to service its planned operating activities and fund some potential acquisition activity. Capital management and interim dividend The Group continues to maintain a responsible approach to its investment, divestment, and corporate development strategy to acquire value-accretive businesses and to monetise non-core assets (which in 1H FY24 had delivered $1.3 million in incremental Group profit). During 1H FY25, we invested significant strategic capital expenditure in scoping and executing an upgrade of our Leeton, NSW manufacturing operations, which will bolster capacity and productivity and assist in the delivery of our commitments to transition to 100% recyclable, reusable or compostable packaging in our Rice Food segment. The project is on track to be fully operational in FY26. The Group continues to explore a well-developed pipeline of potential strategic merger and acquisition opportunities, with the 5 Leverage ratio equals net debt divided by EBITDA over the last 12 Months. 6 Return on Capital Employed (ROCE) equals EBIT divided by Capital Employed where EBIT is Earnings Before Interest and Tax over the last 12 months and Capital Employed is total assets (less cash) less total liabilities (less current and non-current borrowings). SUNRICE INTERIM FINANCIAL REPORT 2025 5 DIRECTORS’ REPORT acquisitions of Simply Delish and SavourLife completed during 1H FY25 as noted above. operative in 1950 – will be front and centre as we celebrate this milestone and look to the future. Delivering consistency and quality of earnings through the cycle and value to our shareholders remains a focus for the Group, and a fully franked interim dividend of 15 cents per B Class Share was declared on 19 December 2024. As communicated in FY24, the Group has reviewed its Growth Strategy to identify new opportunities as we look to evolve and build on the momentum created in recent years. We have commenced work on a range of initiatives to lay the foundations as we look to achieve these ambitious growth targets. Due to their transformative nature, many of these large initiatives will, if realised, contribute to the Group’s performance over the longer term. Concurrently, our portfolio of strategic initiatives also includes projects expected to deliver benefits over a shorter time frame, especially in relation to unlocking efficiencies and effectiveness. We look forward to updating the market as this work progresses. Seasonality As in prior years, the first half results are not expected to reflect the proportional full year results of the Group, because the second half of the year is generally more positively influenced by seasonal factors and consumption habits during festive periods. Risk management The Group continued to review and monitor its exposure to the various risks detailed in our FY24 Annual Report. As at 31 October 2024, no new or signi