Press release·05/14/2025 20:52:55

Sadot Group Inc. Reports Strong First Quarter 2025 Results

Sadot Group Inc., a leading global agri-foods commodities company, has reported its financial results for the first quarter of 2025. The company saw significant growth in revenue and profitability compared to the same period in 2024, driven by expansion into new markets and improved operational efficiency.

Financial Highlights

• Commodity sales increased 24.1% to $132.2 million, up from $106.5 million in Q1 2024.
• Gross profit jumped 114.0% to $6.0 million, compared to $2.8 million in the prior year period.
• Net income attributable to Sadot Group Inc. was $0.9 million, a significant improvement from the $0.3 million net loss in Q1 2024.
• EBITDA (earnings before interest, taxes, depreciation and amortization) more than tripled to $2.5 million, up from $0.1 million a year earlier.

Operational Review

The strong financial performance was driven by Sadot’s successful expansion into new geographic markets, including Latin America, Brazil, Canada, and South Korea. This allowed the company to significantly grow its commodity sales volumes compared to the prior year period.

Cost of goods sold increased 21.7% to $126.2 million, which was lower than the 24.1% rise in revenue. This improvement in gross margin was partially due to the reclassification of certain derivative contract gains into cost of goods sold, which better reflects the economic relationship between these instruments and the company’s inventory and sales activities.

Depreciation and amortization expenses declined 70.3% to $27,000 as farm-related assets became fully depreciated. However, stock-based expenses increased 79.4% to $1.4 million, primarily due to higher consulting fees paid to Aggia LLC for the Sadot Agri-Foods business as well as increased stock compensation for employees and the board of directors.

Sales, general and administrative (SG&A) expenses rose 121.2% to $3.1 million, driven by higher consulting fees for expanding into new markets and increased normal operating costs.

In the company’s two operating segments, Sadot Agri-Foods generated $4.2 million in operating income, while the Sadot Food Service segment contributed $0.1 million in income from discontinued operations.

Liquidity and Capital Resources

As of March 31, 2025, Sadot had $1.9 million in cash, $47.8 million in accounts receivable, and $0.3 million in inventory. The company’s current ratio, which measures short-term liquidity, improved to 1.44 from 1.16 at the end of 2024. Working capital increased to $21.9 million from $20.5 million over the same period.

While Sadot maintains sufficient working capital, the company has experienced delays in converting receivables into cash, which has impacted short-term liquidity. To address this, Sadot utilizes a factoring arrangement to sell eligible receivables and generate upfront cash.

Management believes Sadot’s current asset base, factoring capacity, and access to additional financing sources provide the flexibility to support ongoing operations in the near term. However, the company may need to raise additional capital in the future to fund growth and expansion plans.

Outlook and Key Risks

Looking ahead, Sadot remains focused on further expanding its global footprint, improving operational efficiency, and enhancing profitability. The company sees significant opportunities to grow its commodity trading and farming businesses, particularly in emerging markets.

However, Sadot faces several key risks that could impact future performance. These include:

• Seasonality in the agricultural industry, which can cause fluctuations in revenues and earnings
• Potential delays in converting accounts receivable to cash, which could strain liquidity
• Uncertainty around the company’s ability to raise additional capital on favorable terms, if needed
• Legal proceedings, such as the ongoing dispute with Cropit Farming Limited in Zambia, which could result in unfavorable outcomes

Overall, Sadot Group Inc. delivered a strong start to 2025, demonstrating the success of its growth strategy and operational improvements. While the company faces some near-term challenges, management remains confident in Sadot’s ability to capitalize on the significant opportunities in the global agri-foods commodities market.