GRAINCORP Limited has posted an underlying EBITDA of $140 million for the six months to March 31, up $35M on its corresponding 1H20 figure, and has lifted its earnings guidance for the full year to September to $255-$285M from $230-$270M seen previously.
“This result and the outlook reflect a positive rebound in growing conditions on the east coast of Australia and the operating initiatives now embedded in our business,” GrainCorp managing director and CEO Robert Spurway said.
GrainCorp is eastern Australia’s largest bulk handler by far, and is an international grain trader and stakeholder in GrainsConnect Canada, as well as the leading oilseed crusher in Australia and New Zealand.
GrainCorp exported 3.1M tonnes of Australian grain in 1H21 compared with just 600,000t in 1H20, and received 14.5Mt of grain, up from 3.8Mt in the prior corresponding period.
“Our agribusiness earnings were up substantially, driven by the much larger crop and increased grain volumes in our network.
“Receivals and exports were up materially, supported by strong global demand and pricing for Australian grain and oilseeds.”
Net profit after tax (NPAT) for 1H21 has come in at $51M, up from $27M in 1H20, and the forecast for FY21 has been lifted to $80-$105M, up from $60-$85M seen previously.
“We’re seeing strong results and a strong outlook for the remainder of the year,” Mr Spurway said.
GrainCorp grain carry-out from March 31 was 10.1Mt, and the company expects to be carrying 3.5Mt-4.5Mt as of September 30.
“There is good export demand that extends well into FY22, supported by high levels of carry-out grain anticipated at the full year.
For FY21, GrainCorp sees its grain receivals at 15.5-16.5Mt, domestic outload at 4.5-5.5Mt, and exports at 7-8Mt.
Mr Spurway said the HY21 EBITDA result included a $70M payment by GrainCorp under the Crop Production Contract (CPC).
This contrasts with the HY20, when GrainCorp received a $58M gross payment under the CPC.
Mr Spurway said this highlighted the strength of GrainCorp’s current operating performance and the effectiveness of the CPC in smoothing cashflows through the crop cycle.
“The processing business also performed strongly, with high asset utilisation and positive oilseed crush margins.”
GrainCorp’s canola-crushing plant at Numurkah in Victoria is Australia’s biggest oilseed-crushing site, and had a 12-per-cent increase in crush volumes in 1H21 compared with 1H20.
“Global demand for vegetable oils remains elevated and this is supporting values across our oils portfolio, including canola oil and used cooking oil.”
GrainCorp’s board of directors has declared an interim dividend of 8 cents per share, fully franked, for the HY21 period, which compares with the FY20 final dividend of 7 cents.