Free Subscription

  • Access daily briefings and unlimited news articles

Premium

Only $39.95 per year
  • Quarterly magazine and digital
  • Indepth executive interviews
  • Unlimited news and insights
  • Expert opinion and analysis

GrainCorp H1 profit down 32.4 per cent

GRAINCORP1GrainCorp’s first-half profit has dropped nearly a third to $20.4 million.

Net profit for the six months to March 31 dropped 32.4 per cent from $30.2 million despite revenue rising 4.8 per cent to $2.07 billion.

MD and CEO Mark Palmquist said the result is consistent with the earnings guidance provided in February 2016 of $240 million – $270 million EBITDA and $40 million – $55 million underlying NPAT.

Palmquist said there is a solid progress on the company’s major capital projects, such as the significant expansion of its Brisbane bulk liquid storage capability.

“These projects will embed improved performance across our businesses as they are brought online. In the immediate term however, global trading conditions continue to weigh on the Australian grains sector, particularly affecting oilseed crush margins and grain exports from the eastern states,” he said.

“It has been a more challenging half for GrainCorp Oils, which has experienced lower crush margins due to high European demand for canola seed off a smaller crop resulting in tighter supply and higher procurement costs. Ongoing weakness in the New Zealand dairy sector has also affected the feeds and liquid terminals businesses in that country,” he said.

“We expect all these cyclical factors to improve over time. Our new refining and packaging infrastructure delivers significant efficiencies and will commence with a modest contribution to earnings uplift in the second half.”

He said the company’s marketing has performed well despite the subdued market and relatively expensive price of eastern Australian grain in global markets for much of the half.

 

You have 3 free articles.