GrainCorp revises earnings and profits, tips big harvest
GrainCorp has revised its financial forecasts for 2020-21. See the big differences.
A big harvest and strong grain prices have set up east coast grain company GrainCorp for its best financial year in six seasons.
GrainCorp has increased its forecast of full-year underlying earnings before interest, taxation, depreciation and amortisation to $255-$285 million, well above its previous guidance of $230-$270 million.
That is after paying out $70 million to its insurer under the crop production contract.
GrainCorp managing director Robert Spurway said full-year earnings would have been $325-$355 million without the payment, indicating the big grain harvest on the east coast of Australia.
He said full-year underlying net profit after tax was now estimated to be $80-$105 million, significantly higher than its previous forecast of $60-$85 million.
Releasing its first half results, GrainCorp said EBITDA from continuing operations for the six months to March 31 was $140.1 million.
The EBITDA was 33 per cent higher than the $105.1 million recorded for the previous corresponding period.
“This result and the outlook, reflect a positive rebound in growing conditions on the east coast of Australia and the operating initiatives now embedded in our business,” Mr Spurway said.
“Our agribusiness earnings were up substantially, driven by the much larger crop and increased grain volumes in our network.
“Receivals and exports were up materially, supported by strong global demand and pricing for Australian grain and oilseeds.”
Mr Spurway said GrainCorp was expecting to see slightly higher carry-over grain beyond September 30 but that had advantages in ensuring a continuation of exports into the early part of next season, plus extra revenue in storage fees.
GrainCorp was expecting receivals for 2020-21 to end up between 15.5 million tonnes and 16.5 million tonnes, making it the biggest intake on record, surpassing the 15 million tonnes received in 2016-17.
Exports were forecast to end the year at seven to eight million tonnes.
With outload to the domestic market of 4.5-5.5 million tonnes, that meant the company was expecting to carry over 3.5-4.5 million tonnes into next season.
Mr Spurway said good subsoil moisture and positive rainfall outlook across many parts of the east coast bode well for another good season in 2021-22.
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