Forafric Global PLC

Forafric Global PLC operates as an integrated, global business focused on the purchase, storage, transport, processing, and sale of agricultural commodities and commodity products, primarily flour, semolina, pasta, and couscous ¹. The company's core operations are concentrated in the large and growing African food market, particularly in Morocco, where most of its facilities and customers are located ². The business model is centered on processing wheat into staple food products, with revenue generation directly tied to the volume and pricing of these processed goods. The company serves wholesale food manufacturers and distributors ³.

Forafric's competitive positioning in the Moroccan market is described as a leader in the wheat milling business, boasting a milling capacity of 3,700 tons per day ⁴. This leadership position is stated to provide better access to raw materials, improved productivity, and leverage from its two main brands, MayMouna and Tria ⁵. Raw material costs, primarily wheat, constitute up to 90% of total costs, making efficient procurement a key driver of profitability ⁶. The company's total volume of 338,472 tons per year as of December 31, 2025, is cited as providing significant bargaining power with international wheat providers ⁷.

The company's product portfolio is segmented into Soft Wheat, Durum Wheat, and Couscous and Pasta. Soft wheat products, including pastry flour, extra white flour, and "The Baker" flour, are primarily used for bread and pastries ⁸. Durum wheat products, such as whole meal flour, Finot, fine semolina, coarse semolina, and Finette, are used for pasta, couscous, and traditional Moroccan breads ⁹. The MayMouna brand is positioned as an innovative brand for Moroccan households, known for its unique packaging and diversified product range, while Tria is a highly respected brand for packaged flour, precooked couscous, and packaged pasta, particularly for industrial clients ¹⁰.

For the fiscal year ended December 31, 2025, Forafric Global PLC reported total revenues of $176,488 thousand ¹¹, a significant decrease from $274,223 thousand in the prior year ¹². Cost of sales amounted to $158,091 thousand ¹³, resulting in a gross profit of $18,397 thousand ¹⁴. The gross profit margin for 2025 was approximately 10.4% ($18,397 thousand / $176,488 thousand). Operating expenses, primarily selling, general and administrative expenses, totaled $21,952 thousand ¹⁵, leading to an operating loss from continuing operations of $3,555 thousand ¹⁶. The company reported a net loss of $13,790 thousand ¹⁷ for the year, with a diluted EPS of $(0.45) from continuing operations ¹⁸ and $(0.06) from discontinued operations ¹⁹. Cash and cash equivalents increased to $14,309 thousand as of December 31, 2025, from $12,231 thousand in the prior year ²⁰. Total current liabilities were $207,591 thousand ²¹, and long-term debt was $17,628 thousand ²². The company had an accumulated deficit of $154,569 thousand as of December 31, 2025 ²³.

Year-over-year, total revenues decreased by $97,735 thousand, or 35.6% ²⁴, primarily due to a decrease in crushed volume for both soft wheat and durum wheat in Morocco, attributed to a lack of working capital financing ²⁵. Cost of sales decreased by $88,800 thousand, or 36.0% ²⁶, in line with the reduced crushed volume. Gross profit declined by $8,935 thousand, or 32.7% ²⁷. Selling, general and administrative expenses decreased by $13,141 thousand, or 37.4% ²⁸, reflecting the decrease in activity in Morocco. Segment-wise, Soft Wheat sales decreased by $64,954 thousand, or 30.2% ²⁹, and Durum Wheat sales saw a substantial decline of $21,180 thousand, or 77.2% ³⁰, largely due to the planned asset disposal of a semolina crushing facility ³¹. Couscous and Pasta sales decreased by $9,624 thousand, or 35.6% ³². Operating income for Soft Wheat improved from a loss of $(1,208) thousand in 2024 to a profit of $2,378 thousand in 2025 ³³, while Durum Wheat operating loss widened to $(2,438) thousand from $(1,996) thousand ³⁴. Couscous and Pasta operating income also improved from a loss of $(1,612) thousand to a profit of $2,137 thousand ³⁵.

During the reported period, Forafric undertook several significant operational developments. In July 2023, it acquired 90% of Société Industrielle de Minoterie du Sud (SIMS), a soft wheat milling company in Marrakesh, Morocco, for approximately $56 thousand in cash and noncontrolling interest, and assumed $5.3 million in debt ³⁶. In April 2024, the subsidiary Epidor signed a 10-year long-term lease agreement for a mill in Meknes, Morocco, with annual rental fees starting at $692,308 for the first five years ³⁷. As part of a new balance sheet strengthening strategy with a Morocco and soft wheat focus, the company divested non-core assets in 2025: it sold part of its ownership in Moulins du Sahel Mali S.A. (MDS Mali), Moulin du Sahel Burkina (MDS BF), and Grands Moulins du Tenere Niger (MDS Niger) to Millcorp Geneva SA for $15.7 million ³⁸, retaining a 51% controlling interest in MDS Mali and MDS Burkina, and a 25% minority interest in MDS Niger ³⁹. Additionally, it sold 100% of its subsidiary Prodela, engaged in animal feeding, to Millcorp for approximately $1 million ⁴⁰, and 100% of its logistics subsidiary Finalog SA for $8.3 million ⁴¹. In March 2026, subsequent to the fiscal year-end, the company completed the sale of long-term assets related to a durum wheat mill in Casablanca, Morocco, for $18.7 million ⁴².

Forafric Global PLC is actively pursuing several strategies to address its liquidity challenges and drive future growth. Management is negotiating with investors and financial institutions for additional financing and exploring cost-reduction initiatives ⁴³. The company has already completed the sale of a wholly owned subsidiary engaged in logistics activities in August 2025 for proceeds of $8.3 million ⁴⁴ and the sale of long-term assets related to a durum wheat milling operation in March 2026 for proceeds of $18.7 million ⁴⁵. These divestitures are part of a new balance sheet strengthening strategy with a Morocco and soft wheat focus, aiming to improve the working capital position ⁴⁶.

A significant growth area involves a strategic expansion initiative announced on April 23, 2026, to complement its core agribusiness operations by pursuing opportunities in defense, food security, and energy infrastructure ⁴⁷. This expansion will be executed through joint ventures, partnerships, and selective investments, with a disciplined approach to capital allocation ⁴⁸. In the defense sector, the company is exploring partnership-led approaches focused on advanced defense and security technologies, including artificial intelligence, unmanned aerial vehicles, counter-UAV/anti-drone laser systems, and related platforms, aiming to position itself as a regional platform for deployment and commercialization ⁴⁹. For food security, Forafric intends to broaden its role across the agricultural value chain by expanding beyond traditional milling into higher-value activities such as origination, trading, and distribution, to support supply-chain resilience and capture additional commercial opportunities ⁵⁰. In the energy sector, the company is evaluating opportunities aligned with growing regional demand for reliable and scalable power solutions, with potential projects supporting industrial activity and broader infrastructure development in its core markets ⁵¹.

Operationally, the company's strategy includes improving productivity and reducing industrial costs, aiming to maintain crushing costs below $30 per ton produced ⁵². This involves monitoring energy, equipment usage, logistics, human resources, and financial costs ⁵³. The company also plans to continue its focus on its two main brands, MayMouna and Tria, which are popular in the Moroccan market ⁵⁴.

Regarding capital allocation, the company's board of directors will have discretion on whether to distribute dividends, but it is not expected to pay any cash dividends in the foreseeable future, as funds will be retained to support business development and growth ⁵⁵. The company requires significant capital for operations and capital expenditures, and its working capital needs are directly affected by agricultural commodity prices ⁵⁶. Raising additional capital through equity or convertible debt securities may dilute existing shareholder ownership ⁵⁷.

Management has explicitly flagged several structural headwinds and execution risks. The proposed strategic expansion into defense, food security, and energy is at an early stage and requires new capabilities, regulatory clearances, and counterparties, with no assurance of successful implementation or realization of anticipated benefits ⁵⁸. These initiatives increase reliance on third parties through joint ventures and partnerships, which may involve shared control, divergent objectives, and compliance challenges ⁵⁹. Potential opportunities in the Middle East and North Africa are subject to geopolitical instability, conflict, sanctions, export controls, and policy changes that could disrupt operations and affect project timing and returns ⁶⁰. The company also faces significant competition in highly competitive global commodity markets, which could lead to market share loss or price reductions ⁶¹.

Forafric Global PLC faces material risks including significant fluctuations in agricultural commodity and raw material prices, transportation costs, energy prices, interest rates, and foreign currency exchange rates, all of which are outside of the company's control and directly impact margins ⁶². The business is highly dependent on obtaining quality raw materials, and any inability to do so would necessitate additional costs for enhancers, negatively impacting results ⁶³. Disruptions in distribution and logistical systems, particularly increases in shipping and freight costs, could materially adversely affect operations ⁶⁴. The Moroccan flour mill market is characterized by supply and demand imbalances, with supply capacity exceeding demand, forcing the company to compete on price and reduce margins to maintain market share ⁶⁵. Global and regional economic downturns, including recessions, may reduce demand for agricultural commodities ⁶⁶. The company is exposed to currency exchange rate fluctuations, particularly between the U.S. dollar, Angolan Kwanza, and Euro, which can negatively impact revenues, expenses, and asset values ⁶⁷. Operating globally and in emerging markets, including Eastern Europe, Asia-Pacific, the Middle East, and Africa, exposes the company to volatile international economic, political, and market conditions, changes in laws and regulations, sovereign risk, exchange controls, labor disruptions, civil unrest, and adverse trade policies ⁶⁸. A significant portion of operations and sales are in Morocco, making the business vulnerable to natural disasters, economic downturns, or political instability in the country ⁶⁹. Severe adverse weather conditions and the effects of global warming can cause crop failures, reduced harvests, and price volatility, impacting raw material supply, pricing, and quality, and potentially increasing costs ⁷⁰. The company has incurred net losses of $13.8 million, $23.4 million, and $12.5 million for the years ended December 31, 2025, 2024, and 2023, respectively, and as of December 31, 2025, had an accumulated deficit of $154.6 million, raising substantial doubt about its ability to continue as a going concern ⁷¹. The proposed sale of a controlling interest in Forafric Maroc SA to Cap Holding is subject to regulatory and other approvals and may not be completed on anticipated terms or timelines, or at all, potentially disrupting relationships and incurring additional costs ⁷². The strategic expansion into defense, food security, and energy is at an early stage, requires new capabilities and regulatory clearances, and may not achieve intended benefits, exposing the company to new and heightened risks, including reliance on third parties and geopolitical instability in target markets ⁷³. The company is also subject to legal proceedings, including a claim from Crédit Agricole du Maroc (CAM) for immediate repayment of $42 million in outstanding credit facilities, which, while a settlement is being finalized, carries the risk of not being resolved on anticipated terms ⁷⁴.

Management's message to shareholders emphasizes a strategic pivot to strengthen the balance sheet and focus on core operations while exploring new growth avenues. The company has adopted a new balance sheet strengthening strategy with a Morocco and soft wheat focus, which involves divesting non-core assets such as operations outside of Morocco, durum wheat-focused businesses, and logistics activities within Morocco ⁷⁵. This strategy is intended to significantly improve the company's working capital position ⁷⁶. Concurrently, management announced a strategic expansion initiative on April 23, 2026, to complement core agribusiness by pursuing opportunities in defense, food security, and energy infrastructure through joint ventures, partnerships, and selective investments ⁷⁷. This disciplined approach to capital allocation is aimed at enhancing economic resilience and national security in their core regions of operation ⁷⁸. Despite incurring net losses of $13.8 million for the year ended December 31, 2025, and having an accumulated deficit of $154.6 million, which raises substantial doubt about the company's ability to continue as a going concern, management is actively pursuing additional financing, cost-reduction initiatives, and asset sales ⁷⁹. The company completed the sale of a logistics subsidiary in August 2025 for $8.3 million ⁸⁰ and long-term assets of a durum wheat mill in March 2026 for $18.7 million ⁸¹. Furthermore, antitrust approval has been obtained for a proposed transaction where Cap Holding may acquire a controlling interest in Forafric Maroc SA, though completion remains subject to board approval and other conditions ⁸².