SunRice financial results: Solid $12 million half-year profit despite small rice crop

SunRice has posted a solid half-year profit of $12 million, despite challenging headwinds facing the industry. See how the new season’s crop will affect the rice processor.

Next year’s rice crop should be 10 times larger than last harvest. Picture: Zoe Phillips

RICE processor SunRice Group has posted a half-yearly after-tax profit similar to the previous year, despite challenging headwinds facing the industry.

In a report just released to the Australian Securities Exchange, SunRice said its net profit after tax for the six months to October 31 this year was $12.1 million off revenue of $505.4 million.

That was in line with the previous corresponding period’s NPAT of $12.5 million, but revenue was much higher at $541 million.

SunRice chief executive officer Rob Gordon said the results related to the second consecutive year of record low rice production in Australia.

Only 45,000 paddy tonnes of rice were produced by NSW growers last harvest — the second lowest crop on record, but much higher than the 18,000 tonnes produced in 2007-08.

Mr Gordon said the company faced global headwinds and challenges related to COVID-19 during the half year period but had delivered a strong financial result.

“Our strong balance sheet has allowed the group to not only manage these challenges with

great success, but also continue implementing our 2022 growth strategy — which as we start recovering from the bottom of the Australian agricultural cycle, positions the company favourably for the future,” he said.

“While the second half of 2020-21 remains challenging, we are expecting 2021-22 results to improve, in part as the larger CY21 Riverina crop is harvested and the Australian rice pool business recovers, and we realise the benefits of the investment in strategic and organic growth initiatives.”

SunRice was expecting this season’s rice crop to top more than 450,000 paddy tonnes — or 10 times last harvest.

The company said this should allow its rice pool business to cover its overheads.

During the past six months, the rice pool business posted a loss of $3.1 million.

SunRice said a larger crop to be harvested next April should help its Coprice and Rice Food divisions, plus make investments such as the $10 million bran stabilisation plant start yielding returns through increased throughput and improved asset utilisation.

But it said the financial effects would not flow on until the 2021-22 results.

MORE

SUNRICE BUYS FOOD IMPORTER

BONUS FOR SUNRICE BOSS RANKLES GROWER

SMALL RICE CROP POSES IMPORT THREAT