GrainCorp profit drops

15 May, 2014 09:20 AM
Comments
5
 
It’s a long season and, as always, favourable conditions and good finishing rains will be critical

A SMALLER crop in northern growing regions has seen GrainCorp's first-half statutory net profit drop 43 per cent to $50 million.

GrainCorp has today reported its half-year earnings of $166m EBITDA (earnings before interest, tax, depreciation and amortisation and before significant items) is down from $227m for the same period in 2013.

  • Ellerston ups GrainCorp stake
  • Its NPAT (net profit after tax before significant items of $11m) of $61.2m is down 43.6pc from the first-half 2013 result of $109m.

    In a statement to the ASX, GrainCorp executive chairman and interim chief executive Don Taylor said it was a pleasing result, delivered in the face of a more challenging period for the company’s grain business.

    “GrainCorp Malt and GrainCorp Oils have both delivered consistent results, with Malt continuing to operate at high capacity and GrainCorp Oils performing well despite continuing pressure on refining volumes,” he said.

    Mr Taylor said that the performance of the grains businesses was also positive given the lower crop volumes.

    “Our Storage and Logistics business’ earnings were affected by a below average carry-in and the smaller crop in northern regions," he said.

    "This translated to lower grain receivals and increased

    demand from domestic end-users, limiting the amount of grain available for export.

    “While the intense competition for a smaller crop also means that GrainCorp Marketing’s result was lower year-on-year, it is pleasing that this business has reported a positive result in an environment that has been extremely challenging.”

    GrainCorp’s board has declared an interim dividend of 15 cents per share.

    Mr Taylor said GrainCorp expected the 2014 financial year earnings would be heavily weighted to the first-half as a result of the busy export program and low residual levels of grain in the network.

    As a result, the company was maintaining the full-year earnings guidance it provided in February of an underlying NPAT of $80m to $100m.

    “Looking further ahead, some good pre-planting rains have been recorded in many areas of our catchment with canola planting substantially underway in many areas and good starts for wheat and barley," Mr Taylor said.

    "However, it’s a long season and, as always, favourable conditions and good finishing rains will be critical to the delivery of a good crop in eastern Australia."

    Mr Taylor said the company’s search for a new CEO was progressing well, with an announcement expected in the middle of the calendar year.

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    READER COMMENTS

    leonard corio
    15/05/2014 12:52:19 PM

    CBH has done all this and more and done it better as a grower owned co-op.
    boris
    15/05/2014 9:58:11 PM

    CBH is nothing more than an over-inflated shire council. They sheet home their costs at the end of the year to their subservient growers. All about to change though as the Barnett government rolls out the red carpet to competition. This should ensure the bulk of the Wheatbelt doesn't go broke.
    wtf
    16/05/2014 7:14:37 AM

    there might be a lesson there for the rest of us leonard.
    GFA
    16/05/2014 4:44:07 PM

    The one thing that could really turn around the fortunes of the wheat belt (and this nation), Boris is not about to happen, but it is still killing us all. That is the fact that while industry is totally deregulated and exposed to global markets, our labour system is still highly protected by regulation. That arbitrarily inflated labour system component adds costs to our ledger at every turn. Its biggest impact is on our input and supply chain costs, but is not restricted to those. If labour was as deregulated as business, farm gate returns on cropping could rise dramatically.
    Mark
    19/05/2014 10:37:06 PM

    Graincorp profit drops, what was the government thinking. The Australian government must carry responsibility for its lack of vision.

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