Australian Oilseeds Holdings Reports 6.1% Revenue Growth but Posts AUD 646,333 Loss

Australian Oilseeds Holdings Ltd. reported its financial results for the three months ending September 30, 2024, revealing a revenue increase of 6.1% to AUD 10.3 million, compared to AUD 9.7 million in the same period last year. This growth was primarily driven by heightened demand for cold-pressed canola oil, attributed to expanded customer contracts, including significant supply agreements with Costco Australia and Woolworths. However, the company experienced a substantial decline in profitability, posting a loss of AUD 646,333, a stark contrast to a profit of AUD 1.4 million in the prior year.

The company's cost of sales surged by 30.7% to AUD 9.5 million, largely due to rising material costs and increased labor expenses. Gross profit fell sharply by 66.4% to AUD 830,380, reflecting the impact of these rising costs on the company's margins. General and administrative expenses decreased slightly by 6.3% to AUD 830,406, while selling and marketing expenses saw a significant increase of 189.4% to AUD 199,345, driven by the establishment of a sales team and promotional activities aimed at enhancing brand awareness.

In terms of operational metrics, Australian Oilseeds reported a net current liability position of AUD 13.2 million as of September 30, 2024, compared to AUD 6.9 million at the end of the previous fiscal year. The company’s cash and cash equivalents improved to AUD 2.1 million from AUD 514,140, indicating a positive cash flow from operating activities of AUD 588,341, a notable recovery from the AUD 1.5 million outflow recorded in the same quarter of 2023. The company’s top five customers accounted for 72.7% of total sales, underscoring a significant reliance on a limited customer base.

Strategically, Australian Oilseeds completed a business combination with EDOC Acquisition Corp on March 21, 2024, which has positioned the company for growth in the public market. The merger has facilitated the listing of its ordinary shares on the Nasdaq under the ticker "COOT." The company is also exploring additional financing options, including a potential US$50 million equity line of credit, to bolster its liquidity and support ongoing operations.

Looking ahead, Australian Oilseeds Holdings Ltd. anticipates continued revenue growth driven by its retail expansion and new product offerings. However, the company acknowledges the challenges posed by rising costs and market conditions, which may impact profitability. Management remains focused on improving operational efficiencies and securing additional funding to ensure the company's long-term viability and growth trajectory.