SUNRICE, the trading name of Ricegrowers Limited, has reported consolidated revenue for the Group of $1.1 billion for the year ended 30 April 2017 (FY17), a 12 per cent decrease on the previous year (FY16).
The company also reported a Net Profit After Tax (NPAT) of $34.2 million, a 34pc decrease on the previous year.
Financial results were driven by a combination of several external factors that included:
- the lower Riverina rice crop;
- lower medium grain rice prices due to increased global production and stockpile levels;
- negative macroeconomic trends in key SunRice markets;
- and weaker trading conditions experienced by CopRice and Riviana.
SunRice CEO, Rob Gordon, said after five years of improving financial performance and market expansion, this year saw a range of external factors combine to impact on the business.
However, rather than focus on defensive tactics to counter adverse market conditions, he said the company accelerated the business strategy and initiatives to strengthen SunRice for the future.
“As a business, we had to supply enough SunRice products globally to satisfy total demand, which equated to over four times the size of the much-reduced 2016 Riverina rice crop, and we intensified our international sourcing efforts,” he said.
“Most notably, we successfully established a sustainable supply chain from Vietnam that contributed a significant 320,000 paddy tonnes to the total 500,000 paddy tonnes we sourced around the world, which also included around 115,000 paddy tonnes from SunFoods in the US.
“Overarching conditions in global rice markets were characterised by medium grain rice prices halving to decade lows, driven by increased supply as global paddy production and stockpile levels reached record levels.
“Exacerbating the impact of these weak prices were negative macroeconomic trends, especially in SunRice’s major markets across the Pacific and the Middle East.
“Trading conditions for our complementary domestic businesses were also tough: CopRice experienced vastly reduced stockfeed demand; and Riviana contended with a mining industry cyclical downturn that undermined foodservice volumes.
“However, during this market downturn, our strategy effectively insulated our financial performance through the ability of our brands to support robust pricing in key markets.
“Notwithstanding challenging market conditions, the business delivered profit within guidance, an eight per cent fully franked dividend yield to shareholders, and a guaranteed paddy price of $415 per tonne, while at the same time almost halving our gearing to 17pc.
“This year we proved that our strategy has created commercial resilience that will ensure a secure future for our growers, our shareholders and the Australian rice industry.”
In line with the smaller crop, Rice Pool revenue was down by 41pc and the business experienced a loss of $32.5 million.
SunRice’s results will be presented at the Ricegrowers Limited Annual General Meeting, to be held at 10.30am on Friday 25 August 2017 at Jerilderie Civic Hall, Jerilderie, NSW.