GRAINCORP has reported a net profit after tax of $5 million for the half year to March 31, down 92 percent on HY25, as reduced grower selling constrained volumes and intensified market competition.

The company’s underlying earnings before interest, tax, depreciation and amortisation fell 32.68 percent to $136M, with the agribusiness segment contributing $104M during the half.

Network throughput fell to 26.5 million tonnes (Mt) during the half-year from 29.5Mt in HY25, reflecting lower carry-in stocks and reduced grower selling that weighed on receivals.

GrainCorp managing director and chief executive officer Robert Spurway said the company had been negatively affected by eastern Australian growers choosing to hold grain amid global oversupply and weaker prices.

“In just over the last 12 months or thereabouts, we saw all production areas perform well with no global droughts, and created that oversupply of grain,” Mr Spurway said.

“What that means is that customers of grain are not particularly concerned or acting with urgency to acquire grain in the forward period because they know there’s plenty of it there.

“Markets are in-carry and as a result, prices are lower than you’d expect in terms of long-term averages.”

He said likewise Australian growers and grain sellers were “not particularly excited about the prevailing prices” and were, therefore, tending to wait and hold grain “hoping prices might improve or demand-supply might change”.

Key grain handling metrics for GrainCorp for east coast Australia. Note the total grain handled includes GrainCorp carry-in plus receivals plus imports plus domestic outload plus exports plus GrainCorp carry-out. Source GrainCorp

Mr Spurway said GrainCorp operations were shielded from the impacts of the Middle East conflict.

“We have experienced minimal impact from the Middle East conflict to date, with our supply chain continuing to operate as normal.

“GrainCorp’s resilient business model, integrated supply chain and strong balance sheet underpin our demonstrated ability to consistently navigate commodity cycles and capitalise on opportunities to deliver long-term value for shareholders.”

GrainCorp’s oilseed crush volumes fell slightly to 277,000t during the half, compared to 283,000t in HY25, and edible oil sales dropped about 10pc to 98,000t.

Animal nutrition sales volumes reached a record 390,000t during the half, while agri-energy volumes fell 22,000t to 158,000t.

This corresponded to an almost 40pc drop in EBITDA for the Nutrition and Energy segment, which fell from $75M in HY25 to $46M in the current half.

Strategic initiatives

The company continues to progress its exit from GrainsConnect Canada, with regulatory approval and completion expected in FY26.

Within Nutrition and Energy, GrainCorp is proceeding with upgrades to oil-processing capabilities and pursuing capacity expansion in Animal Nutrition, such as at the Kyneton plant in Victoria.

The $30M upgrade to upgrade to key equipment at its West Footscray plant is under way, with completion expected in FY27.

The works are expected to lower ongoing operating costs and improve product quality for customers.

Mr Spurway said GrainCorp was also continuing to pursue its renewable fuels agenda in partnership with IFM Investors and Ampol.

“GrainCorp is progressing feasibility work on additional canola crushing capacity to build a domestic renewable fuels supply chain.

“We were encouraged by the announcements in the Federal Government budget earlier this week around a commitment to introduce demand-side measures for low-carbon liquid fuels, and of course ARENA’s open to applications in their $1.1 billion Cleaner Fuels program.

“Our progress in that space is leveraging our existing position as a leading supplier of Australian feedstocks.

“We’re working closely and strongly aligned with our MOU partners Ampol and IFM to develop a renewable fuel refining supply chain, and the business case for that is being developed to underpin the initial investment.

“The conditions are strong, the fundamentals are there, and we’re working hard with our partners to bring that to fruition.”

Winter-crop planting

GrainCorp reaffirms its FY26 earnings guidance of underlying EBITDA of $200-240M and NPAT of $20-50M, as announced on February 2.

Mr Spurway said the company was awaiting ABARES initial winter-crop forecast on June 2, but noted crop size would, as always, depend on weather conditions through to harvest.

“Favourable planting conditions exist in Victoria and southern New South Wales, and planting is well under way in those regions.

“We do expect that northern NSW and Queensland will require ongoing autumn and winter rainfall and we are encouraged by the short-term forecast and, along with growers, we’ll be looking for more follow-up rain in those regions in the coming weeks and months.”

He said, while the conflict in the Middle East has impacted global fuel and fertiliser markets, there is sufficient supply available for planting, although input pricing for growers remains elevated.

“We’ll continue to engage with industry and government as these conditions evolve, and our supply chain remains well positioned to support growers and customers as the season progresses.”

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