GrainCorp HY profit jumps 63%
GrainCorp Limited (GNC) posted a net profit after tax of $52.7 million in its 2010 half year financial results, up 63% from a year earlier. In the announcement released last night, the company also declared a fully franked interim dividend of 15c per share.
GrainCorp interim CEO, Ian Wilton, said it was a strong result, which highlighted the contribution of the malt business to earnings.
“The aim of the acquisition of United Malt Holdings was to reduce earnings volatility,” Mr Wilton said.
“This was successfully achieved with the $58 million contribution to EBITDA from malt, in line with expectations.”
He said earnings from grain storage and port elevation were lower than last year due to lower 2009/10 grain production.
The company adjusted its full year EBITDA guidance from $180 to $210 million to between $190 and $210 million and expect a full year NPAT of between $75 and $90 million.
“Earnings from malt sales are on budget, demonstrating the value of our strong customer relationships and long term supply agreements,” Mr Wilton said.
“Second half earnings from grain handling will not be as strong as the same period in 2009.”
GrainCorp received more than 1 million tonnes of grain ex-farm for the export market.
“We don’t expect to receive similar ex‐farm volumes this year, mainly due to reduced export demand resulting from record high world grain stocks and the high value of the Australian dollar during much of 2010.”
“However, recent significant devaluation of the Australian dollar will increase the international competitiveness of Australian grain, and this may boost export activity out of eastern Australia before the end of the current financial year.”
Mr Wilton concluded by saying the currently good subsoil conditions should boost yields.
“Crop forecasters are anticipating an average area will be planted this year,” he said.
“The forecasters also predict that current grain prices will encourage growers to change their crop mix, planting less barley, more canola and pulses, and about an average area of wheat.”
As at 1029 AEST, GrainCorp shares were up 24c to $5.66.
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