The breaking of the drought and the good rains in late 2020 and early this have helped GrainCorp do a bit of ‘breaking’ itself by allowing it to well and truly escape the rut it found itself in as it recovered from the big dry.
In a trading update ahead of yesterday’s AGM, GrainCorp told the ASX that it now expects underlying earnings of between $230 million and $270 million for the 2021 financial year, which if achieved will be a more than doubling last year’s $108 million.
Graincorp also expects to swing to an underlying net profit of between $60 million and $85 million, compared to a $16 million loss in 2020.
That saw GrainCorp shares hit a 10-month high of $4.94 and close up0.8% at $4.71 as the wider market weakened in afternoon trading.
CEO Robert Spurway said in the update (and later told the AGM) the outlook reflects the strong turnaround in cropping conditions in east coast Australia and the continued delivery of GrainCorp’s operational initiatives.
“We experienced near optimal conditions across much of eastern Australia during the recent winter cropping season and this has translated into one of the largest crops in recent history.”
“Our combined intake across harvest has totalled 13.8 million tonnes of receivals year-to-date, eclipsing the 12.9 million tonnes of receivals at the same stage during the last bumper harvest in 2016/17.”
“Pleasingly, at the start of the harvest, we were well positioned to optimise our network of country and port assets, notwithstanding the last three years of drought. This ensured the efficient management of the much larger crop.”
“Our focus now turns to the first major export program in years, with 1.7 million tonnes shipped out since October 2020, and our port bookings nearing capacity through to September 2021.”
The scale of FY21 receivals will also benefit FY22, due to the higher level of carry-over grain into the next season.
In the Processing segment, GrainCorp said it expects an increased supply of canola seed to support strong oilseed crush margins, despite some pressure on meal values.
