Optimistic outlook drives GrainCorp earnings upgrade

GrainCorp has reported a half-year profit of $200 million, and is on track to make the second best earnings result in its history.

GrainCorp chief executive Robert Spurway has upgraded the company’s earnings outlook after heavy autumn rainfall across east coast cropping regions.

The largest grain handler on Australia’s east coast is on track to its second best earnings result in its history as optimism grows for winter crops.

ASX-Listed GrainCorp Ltd on Thursday upgraded its earnings outlook for FY23 to between $500 million and $560 million.

The forecast is a $30 million revision from earnings guidance provided in February of $470 million to $530 million.

The earnings, if achieved, would be second only to last year, when the company reported earnings before net interest, tax, depreciation and amortisation of $703 million and net profit after tax of $380 million.

Managing director and chief executive Robert Spurway, who pocketed a $4.7 million salary last year, said the improved forecast was driven by strong global demand for Australian grain and oilseeds and a good start to the 2023-24 winter cropping season.

“There’s been good rainfall in most areas in the lead-up to the east coast planting period,” he told investors.

“We’re also seeing ongoing growth in east coast Australian grain production as farming practices and technology improves.”

In the half-year to March 31, the company handled 34.8 million tonnes of grain, slightly down from the previous half-year result of 38 million tonnes.

It increased its oilseed crush volume to 256,000 tonnes for the half year, up from 232,000 tonnes the previous half year.

Mr Spurway said the company was evaluating increasing its oilseed crush capacity further to capitalise on global hunger for vegetable oils and Australian farmers planting vast hectares to canola.

GrainCorp has two crushing plants: one at Numurkah in Victoria and one in Pinjarra WA.

The company announced a half-year profit of $200 million and a half-year EBITDA of $383 million. Shareholders will receive a fully franked interim dividend of 24 cents per share.