Inghams Group shares fell on Friday after it warned supply chain-related issues will add an extra $30 million in freight and packaging and up to $50 million in feed costs in the new financial year.
The poultry giant on Friday reported a net profit of $34.6 million for 2025/26, down 61.5 per cent, even though full-year revenue rose 2.4 per cent to $3.2 billion.
"So while the earnings result reflects a difficult year, we exited fiscal 2026 with a more stable operating platform," chief executive Ed Alexander said.
Underlying earnings - before interest, tax, depreciation, and amortisation - of $186.4 million were down by more than 21 per cent.
That was at the lower end of its guidance of between $180 million and $200 million for the year ended June 30.
Inghams, which farms, processes, and sells chicken and turkeys, also warned that the spread of the H5N1 avian influenza virus in Australia was a "real and significant risk" for the whole industry.
"We take this risk extremely seriously and we are prepared for it," Mr Alexander told an earnings call.
The poultry boss pointed to Inghams' nationally diverse operations, with separate states hosting its farms, hatcheries, processing and other facilities.
"That means an outbreak in one location does not automatically translate into disruption across our broad network," he said.
The threat is rising after mass deaths across two states and authorities this week began vaccinating vulnerable wildlife and zoo animals.
More than 1000 crested terns have died on remote islands off South Australia and 28 penguins have died on King Island off Tasmania.
Asked if the bird flu threat was having any impact on demand, Mr Alexander said not so far.
"It's been well communicated that there's no food safety issue pertaining to bird flu," he said, adding that egg producers are certainly seeing an impact.
During the year, Inghams also made cost savings of $82 million after cutting inventory - mainly processed chicken and turkey - and diversifying its customer list, as its key Australian market returned to volume growth.
In total, it processed just over 470 kilotonnes of chickens and turkeys in the year, as the core net selling price increased 1.4 per cent to $6.40 per kilo - still close to its best in at least four years.
Its Australian revenue rose 3.5 per cent to $2.7 billion, on a 2.4 per cent increase in the net country sale price to $6.50 per kilo.
In New Zealand, it achieved a net selling price of $NZ6.81 per kilo.
Inghams sells products to supermarket giant Woolworths, but now at a lower volume after a new supply contract was settled in 2025, although this has been offset by gains for other retailers.
Looking ahead, the poultry group said input cost inflation continues to be a challenge, alongside softer Australian wholesale market prices after industry supplies ramped up.
"That has continued through the first seven weeks of financial year 2027," Mr Alexander said.
Inghams shares were down 4.5 per cent to $1.12 in afternoon trading.
The group will pay a final dividend of 6.1 cents per share, taking the total for the year to 10.1 cents.
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