GRAINCORP Limited has today announced record earnings before interest, taxation, depreciation and amortisation (EBITDA) of $703 million in the year to September 30, more than double the FY21 result of $331M.

Its net profit after tax of $380M was also a record, up from $139M in FY20.

GrainCorp is eastern Australia’s biggest bulk handler by far, and its agribusiness division EBITDA was up 127 per cent from FY21 to $624M.

This reflected an increase in total grain handled to 41.1 million tonnes (Mt), up from 34.4Mt in FY21, and strong margins for grain exports.

Carry-in to FY22 of 4.3Mt, up from 700,000t rolled into the start of FY21, also contributed to higher storage and export volumes.

Speaking at the FY22 presentation, and in a statement accompanying the release of results, GrainCorp CEO and managing director Robert Spurway said export margins out of Western Australia were a contributor.

“We operated our ports at close to full capacity in FY22, exporting 9.2Mt of grain and oilseeds to international markets,” Mr Spurway said.

The export tonnage was the largest seen in a decade, and since October 1, GrainCorp has exported 600,000t of grain to date for 2022-23.

Mr Spurway said investment in east-coast capability has “operated extremely well” to make the most of back-to-back bumper crops, and GrainCorp’s international businesses have also performed well.

“We have made the most of the opportunities that have been there and the strong demand for Australian grain around the world.”

GrainCorp chief financial officer Ian Morrison also alluded to the importance of WA in shipping, while Mr Spurway played down the impact of weather events on its east coast network.

“International business continues to play a strong role in connecting eastern and west-coast grain to international demand,” Mr Morrison said.

Another big feed year tipped

Mr Spurway said conditions throughout the year have supported an above-average winter crop for 2022-23 to follow eastern states’ production of 33.4Mt in 2021-22, up from 32Mt in 2020-21.

“As good as that weather’s been for the crop, it’s also created some devastating flooding.”

He said rain has delayed harvest by several weeks, and GrainCorp is already seeing an impact on quality, although some milling-grade wheat is being received.

“We’re certainly seeing a higher level of feedgrain receivals.”

GrainCorp outloaded 6.4Mt of grain into the domestic market in FY22, up from 5Mt in FY21

“We saw very strong domestic outload, with customers turning to our network as they seek reliable supplies of grain,” Mr Morrison said.

“The factor most likely driving stronger demand was the reliability of the supply chain,” Mr Spurway added.

Mr Spurway said some individual operators were struggling to access transport during the wet-weather events of 2021-22, and this probably pushed more domestic business GrainCorp’s way.

“We did see strong growth in demand for that in the second half.”

While prices for feedgrain are below those for premium segregations, he said they were also trading in very high deciles.

“I do urge some caution in seeing feed grades as downgrades.”

In responding to questions after the presentation, Mr Spurway and Mr Morrison alluded to the fact that bundled feed grades could create significant volume and efficiencies for the GrainCorp supply chain.

GrainCorp was the biggest Australian exporter of cereals and feedgrains to China, Japan and Vietnam, and demand from these and other markets is seen as strong.

“We anticipate continued good demand for Australian grain and oilseeds in FY23, including feed grades.

Black Sea troubles

Mr Spurway said market intelligence indicates Ukraine’s current crop will be around 55-60pc of its normal size, due largely to Russian occupation in some regions, and the greater challenge for Ukraine would continue to be getting crop to market.

“It’s fair to say most of the major operators including ourselves…are not falling over themselves to come out of the Black Sea.

“Our view is that we would see significant disruption on the Black Sea for the next two to three years.

Strength in diversity

GrainCorp is Australasia’s biggest oilseed crusher, and in FY22 processed a record volume of 471,000t, up from 459,000t in FY21, with Mr Morrison saying excellent crush margins continued into the second half of the year.

In order to better utilise its port assets in Queensland, it now has an agreement to export sand, and its Fraser Grain Terminal joint venture in Vancouver, Canada, is expected to ramp up following its initial season dealing with drought-reduced volumes.

The company also has investment in: animal nutrition; alternative protein; agri-energy; digital/agtech, and grower services.

Through ownership of the long-established Auscol as leading supplier of used cooking oil in Australia, it is also involved in the food industry, and in addition collects and consolidates tallow for customers around the world.

Losses were hard to find on GrainCorp’s FY22 balance sheet, with the biggest of $24M coming from its investment in United Malt Group to reflect the drop in UMG’s share price.

First harvest report released

GrainCorp has today released its first Harvest Update for 2022-23, and said the harvest in Queensland was well under way.

“Central Queensland sites (are) starting to fill now, although Darling Downs, Goondiwindi and Western Downs clusters are also ramping up and receiving predominantly wheat,” the report said.

GrainCorp reports the broader Central Queensland (CQ) cluster of sites has recorded its best season in more than a decade, and its Yamala site is on track to fill to capacity for the first time since opening in 2020.

However, progress to date has been slow in NSW and Victoria.

“Late crop development due to (the) mild spring, coupled with recent rainfall events, has delayed on-farm harvest activity and deliveries to NSW and Victoria sites by up to approximately five weeks.”

Harvest is under way in NSW, and GrainCorp sites there are predominantly receiving canola as teams actively assess requirements for segregations as required.

GrainCorp continues to outload more than 250,000t of grain across the network each week despite weather disruptions to rail and road supply chains.

	Fortnight to Nov 16	Harvest to Nov 16
Queensland	NA	962,000
New South Wales	NA	173,600
Victoria	NA	5,400
TOTAL TONNES	NA	1,141,000

Table 1: Receivals for the 2022-23 harvest to date.

Source: GrainCorp