GrainCorp has delivered a bumper half-year net profit after tax of $246 million - up a whopping 380 per cent increase on the $51m reported for the same period last year.
Helped by a big season at home and northern hemisphere grain shortages, including Ukraine war disruptions to the grain trade, the profit is a record for the east coast grains marketer, processor and logistics business.
GrainCorp has subsequently promised farmers it will take advantage of upbeat global markets and promising seasonal conditions at home to maximise strategic initiatives such as planning for extra spending on its storage and export facilities.
"Planning is well underway for additional investment in the lead-up to the 2022-23 harvest to efficiently manage the volumes to be delivered by growers," said managing director Robert Spurway.
Shareholders have also been rewarded with a special 12 cents a share dividend on top of the ordinary dividend of 12 cents to be paid on July 12.
AgTech gets $30m
The company has also used its earnings windfall to launch a $30m corporate venture capital fund to invest in ag sector technology start-up businesses.
It hopes the three year investment can help build long term sustainability for grain growers and the wider industry, and deliver useful technology to deploy within its own operations .
Mr Spurway described the financial result for the six months to March 31 as simply, "exceptional".
He said it reflected excellent performance across all business areas and resilience in GrainCorp's supply chain.
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"Global demand for Australian grain, oilseeds, and vegetable oils has remained elevated after two consecutive bumper crops in east coast Australia and during a period of tight global supply," he said.
"Conflict in Ukraine and resulting Black Sea trade disruptions has also created uncertainty in global grain markets, prompting buyers to seek alternative sources of supply.
"This has further increased demand for Australian commodities."
Recent weather patterns and an ongoing wetter than usual La Nina meteorological trend had already set the scene for another excellent planting season for the 2022-23 winter crop.
This, in turn, was helping confidence in eastern Australian grain supplies and further supporting GrainCorp's export sales and supply chain margins.
The company's total earnings before interest, tax, depreciation and amortisation for the period shot up from $140m a year ago to $470m.
It is predicting a full year underlying EBITDA of up to $670m and full year profits as high as $370m in September.
"This outlook reflects the significant ongoing global demand for Australian grain and oilseeds and favourable planting conditions for the upcoming winter crop," Mr Spurway said.
Throughout the first six months GrainCorp operated all eight of its export ports at close to full capacity to move as much grain as possible to international buyers.
The total grain volume handled grew to 38mt from 30.4m tonnes for the same period last year.
Strong trading
Its international trading business also performed strongly, with contracted grain sales rising to 5.8m tonnes from last year's 5.5m, while strong export margins were posted from Western Australia following a bumper crop in that state.
"Our supply chain resilience demonstrates the value of our infrastructure assets and is a testament to our operations and planning teams," Mr Spurway said.
The company's agribusiness division subsequently reported a 200pc jump in EBITDA to $376m.
The notable increase in opening grain inventories before harvest began (4.3m tonnes, compared with 700,000 a year earlier) also contributed to solid storage and export volumes.
Processing division EBITDA was up 192pc to $70m thanks to increased oilseed crush margins and further efficiency improvements at the company's Victorian and WA plants.
Crush margins were supported by strong global demand for vegetable oils, driven by poor global production in the canola and soybean sectors, plus massive supply disruption from the Black Sea region.
Demand for renewable fuel feedstocks was also helping processing returns.
Food business
GrainCorp Foods' business also performed well, with strong demand for refined vegetable oils.
"GrainCorp is in a strong position to maximise opportunities through the current cycle, while also progressing our strategic initiatives in our core, growth and ESG areas," Mr Spurway said.
The balance sheet was in a healthy position with a core cash balance of $129m at the end of March - a dramatic improvement on $90m in core debt a year ago.
However, net debt was currently $2 billion, compared to $1.4b in 2021, reflecting the company's much increased grain volumes purchased and in storage, plus higher grain values.
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