East Coast agribusiness giant, GrainCorp, has achieved a 173 per cent jump in net profit after tax, posting a record $380 million full year result on the back of big volume increases across its grain handling, marketing and processing divisions.
As good seasonal conditions and peak global demand for grain products continue to reward the company, it will pay shareholders a special 16 cents a share fully franked dividend, plus a 14c/share ordinary dividend for the final half of the 2021-22 year.
GrainCorp handled just over 41m tonnes of grain last financial year, up from 34m in 2020-21.
Export volumes hit 9.2m tonnes as its seaboard grain loaders ran at close to full capacity.
Managing director, Robert Spurway said despite the challenges of global supply chain disruption, unusually wet weather events in the grain belt, the conflict in Ukraine, and an ongoing impact from the COVID-19 pandemic, the market had compensated eastern Australian farmers as they produced a second consecutive bumper grain harvest.
"Global demand for Australian grain, oilseeds and vegetable oils remained strong throughout the 2021-22 year, and our teams have worked hard to navigate supply chain challenges to continue delivering for our customers," he said.
"We have also effectively managed costs and broader inflationary pressures.
"Our business has performed incredibly well."
Each business segment saw increased activity and volumes, resulting in more grain handled and exported, higher oilseed crush volumes and stronger foods sales.
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However, the exceptional margins achieved in the first half of 2021-22 did moderate in the second half, as supply from the northern hemisphere improved.
"Pleasingly, domestic and global demand for feed and milling grades remains strong," Mr Spurway said.
"The result reflects the quality of our businesses and infrastructure assets, our operational performance, and the capability of our teams."
The big wet
While widespread flooding would impact both yield and quality in parts of the grainbelt this year, he expected a large export program would continue, partly because GrainCorp had a high level of grain stockpiled in its network.
"Recent heavy rainfall across large parts of eastern Australia has delayed the harvest by several weeks and continues to present challenges for growers, their communities and local businesses," he said.
"We are working closely with growers to support them in light of the logistical challenges presented by the weather events, and to help maximise the value of their harvest."
Despite the weather challenges, farm sector forecasters were still tipping another well above-average crop.
"Oilseed crush margins are expected to remain favourable, and we are well positioned to continue operating our crushing facilities at high utilisation," Mr Spurway said.
"Overall, GrainCorp is well positioned for the new financial year, with our businesses performing well, a strong balance sheet and pipeline of growth."
Performance highlights
Business highlights of the past year included a 127pc lift in earnings before interest tax and depreciation for the grain handling and marketing business to $624m, reflecting the 20pc increase in grain handled and demand factors.
GrainCorp's international businesses, which includes its Canadian, UK grain handling and trading operations also performed well, with good export margins from Western Australia being notable.
The fats and oils businesses benefited from high global demand for renewable fuel feedstocks, including the company's recycled cooking oil division which handled more than 22m litres last year.
The foods division delivered an 11pc increase in sales volumes as strong demand for refined vegetable oils continued to rise.
Overall, processing EBITDA was up 63pc to $127m, reflecting strong oilseed crush margins and higher volumes aided by efficiency gains at the Numurkah canola crushing plant in northern Victoria.
Crush margins were helped by strong demand for vegetable oils, arising from drought-related canola and soybean crop shortfalls overseas, plus Black Sea region disruption after Russia's invasion of Ukraine, and rising renewable fuel ingredient needs.
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Andrew Marshall
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
