SunRice posts profit of $54.8M, record paddy price in FY23
AUSTRALIAN rice marketer SunRice Group has posted stellar results in the year to June 30, with a record group revenue of $1.64 billion, and net profit after tax of $54.8 million.
SunRice released its FY23 results yesterday, with revenue up 23 percent from FY22, and earnings before interest, tax, depreciation and amortisation of $117M, up 28pc from FY22, with NPAT result up 12pc.
A record naturally determined paddy price of $461 per tonne for medium grain Reiziq was also achieved in FY23.
The 2021-22 crop year saw the Riverina produce 688,000 tonnes of rice, the largest crop in five years, and up 65pc on CY21 production.
This supported strong sales volumes in key premium domestic and international markets in FY23.
The recently harvested CY23 crop of 500,000 paddy tonnes will continue to be processed and marketed throughout FY24, and is expected to continue to underpin supply to these markets throughout the year.
Given increased global supply and competition in key markets, the estimated range for the CY23 pool currently remains at $390-$450/t for medium grain Reiziq.
The next crop will be planted in October and, based on current favourable seasonal conditions, including water availability, SunRice is expecting a fourth consecutive year of abundant Australian rice production in CY24.
SunRice also expects a large amount of the CY23 crop to be carried over at the end of the financial year.
Northern Hemisphere markets returning from drought earlier than expected, particularly in the United States, is an additional factor with potential to moderate returns for pool business, given the finite opportunities for placing Australian medium grain rice into premium markets.
Strong momentum from the second half of FY23 has continued into the first quarter of FY24, where group has been supported by a number of favourable conditions that are anticipated to continue throughout FY24.
These include: positive effects of cycling annualised price increases from FY23; additional price reviews in FY2024; further international expansion, and a weakening Australian dollar, which is supporting Australian rice exports.
Most of these factors are also driving an improvement in group profitability in FY24, further supported by improvements in shipping conditions and costs and the ongoing recovery of CopRice.
However, there are a number of headwinds in FY24 which SunRice continues to monitor and manage.
These include: foreign exchange rate volatility, particularly for the group’s import businesses; surging energy prices; the global interest rate environment; inflationary pressures on consumer spending, and growing conditions offshore.
The SunRice Group remains focused on maintaining a disciplined approach to capital management and balance sheet flexibility, and continues to explore a well-developed pipeline of potential strategic opportunities, including acquisitions as well as divestment of non-core, non-operating assets.
“While we continue to face macro-economic pressures, the group has had a strong start to Financial Year 2024, continuing the momentum from the second half of FY2023,” outgoing SunRice Group CEO Rob Gordon said.