GrainCorp shares eased 7 cents to $6.29 yesterday after investors greeted a return to a full year profit rather warily.
The company had something to boast about for 2008-09: it reversed the previous year’s losses and earned a profit for the year to September 30 after good rains boosted grain receivals and more cost cutting.
Net profit for the year ended September 30 was $63.16 million, compared to a loss of $19.94 million in the previous year.
The result was just above its guidance for a profit between $61 million and $63 million.
GrainCorp shareholders will be getting payout from the company for the first time in at least 18 months with a final dividend 7.27c a share.
It will be paid on December 16, just in time for Christmas for the lucky shareholders.
Grain receivals totalled 10.7 million tonnes during fiscal 2009, with 5.2 million tonnes of grain exports handled and bulk wheat exports adding up to 1.3 million tonnes.
But investors picked up on a poor outlook from CEO, Mark Irwin who said in the ASX statement that grain receivals will be lower in fiscal 2010, due to the tougher seasonal conditions.
"This season we anticipate eastern Australian grain exports will be dominated by grain from Victoria," he said.
"GrainCorp’s year to date grain receivals currently stand at around 4.5 million tonnes, and we estimate we will receive between 8 and 9 million tonnes of winter and summer grains for the full financial year.
"This is a reduction from last financial year, and demonstrates the impact of continued drought conditions in parts of eastern Australia.
"This financial year we are expecting to elevate between 3 and 4 million tonnes of export grain for customers, and between 0.9 and 1.4 million tonnes of non-grain exports, at our port terminals.
"We will provide an update on our grain receivals, grain exports, malt operations, and provide profit guidance, as usual, at our February AGM.
"This means the grades being accumulated at port will be different to last season and the time taken to accumulate cargoes is likely to be shorter, leading to lower port related earnings.
"For fiscal 2009, GrainCorp’s revenue rose 12.8 per cent to $1.73 billion and earnings before interest, tax, depreciation and amortisation grew to $165 million from $51 million in the previous year."
Mr Irwin said the fiscal 2009 result was tangible evidence of how the business has been transformed to cope with the removal of its bulk wheat export monopoly.
"Over the last few years GrainCorp has worked hard to focus on increasing efficiency and reducing cost, and positioning the company to respond to a range of challenges and opportunities," he said.
Earlier in 2009, GrainCorp raised $198 million to restructure its balance sheet and support the acquisition of United Malt Holdings.
"We now have to focus on integrating the malt operations and running the new GrainCorp Malt business unit in a manner that will repay the faith the market showed in supporting the acquisition," Mr Irwin said.
"With the acquisition in November 2009 of United Malt Holdings Group GrainCorp became the world’s fourth largest commercial malt producer.
"The acquisition provides a larger infrastructure footprint, improved trading knowledge, and growth opportunities.
"The malt businesses can produce up to 1.05 million metric tonnes of malt per year.
"There are expansion projects underway (due to complete December 2009 in Scotland and January 2011 in Australia) to increase capacity by approximately 14% to 1.2 million metric tonnes per annum," the company said yesterday.
