After romping home with a whopping $380 million record profit last year, GrainCorp is seriously pruning its expectations by at least $100m for 2022-23, despite enjoying the fruits of another big cropping year and hungry market demand.
The big eastern states bulk grain handler, processor and marketer has tipped a full year profit in the range of $180m and $220m when it eventually reports its full year results in September.
With total grain receivals likely to fall about 2m tonnes behind the previous season and export volumes from its seven port terminals also running slightly behind a year ago, GrainCorp is budgeting on earnings before interest, tax, depreciation and amortisation of $470m to $530m.
Flood losses and wet weather delays during winter and spring, washed out some of the company's total winter grain receival prospects before harvest even began, particularly in NSW and southern Queensland.
More wet weather continued to delay stripping and grain movements in parts of the grain belt until well into December.
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"Our export program is tracking slightly behind last year, at 3m tonnes year-to-date, due to the delayed harvest and logistical challenges caused by flooding" said managing director, Robert Spurway.
However, as summer sorghum crops now start to come off, he expected GrainCorp would execute a full shipping program for the remainder of the year, achieving similar export volumes to last year's 9.3m tonne total - or slightly more.
This year's Queensland and northern NSW sorghum crop is forecast to be the fourth biggest on record, at 2.6m tonnes.
Crop receival tally
Overall, GrainCorp anticipated total winter and summer grain receivals of between 13.5m tonnes and 14.5m tonnes, against 16.3m last season.
Export tonnages would likely range between 8.5m and 9.5m.
Mr Spurway told shareholders at GrainCorp's Sydney annual general meeting the company's profit guidance for the full year was still subject to several market variables.
In general, however the business had benefited from another large eastern Australian crop and robust global demand for grain, oilseeds and vegetable oils.
It had also responded strongly to the market opportunities and staff had worked through the past 12 months' challenges with commitment and resilience to make it "a highly successful year".
"Financial year 2021-22 was a record result for GrainCorp, achieved after two consecutive bumper eastern Australian crops and record oilseed crush volumes," he said,
"It was an extraordinary global demand environment."
Although the northern hemisphere drought, which intensified worldwide demand in 2022, had abated, Australian grain continued to experience good demand.
GrainCorp also remained well positioned to take advantage of the market, with a high level of grain inventory available for shipping.
Strong result expected
"We expect GrainCorp to deliver a strong result in FY23 with our supply chains continuing to run at close to full capacity, strong execution from our teams, and positive global demand," he told the AGM.
"We have the supply chain infrastructure to serve our customers around the world."
Grain intake so far this financial year was almost 12m tonnes, supplemented by a large inventory of opening stocks at the start of harvest totalling 4.9m tonnes.
"We also expect strong summer crop receivals," he said.
"While the recent harvest was interrupted by rain events, with flooding creating challenges for many growers, our teams worked with our grower customers to manage these challenges and bring the crop in."
Chairman, Peter Richards, also praised diligent teamwork across GrainCorp's grain logistics and oil and food processing divisions, which had driven its supply chains to peak capacity.
"This is by far the strongest financial result in our history," Mr Richards said.
"It was driven by strong execution, higher volumes, and robust global demand and achieved amid significant disruption to global grain markets, caused by geopolitical instability, COVID and regional weather events, including both droughts and floods."
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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).
