GrainCorp’s profit for the six months period ending on March 31, 2018 was A$36.1 million, compared with A$90 million during the previous corresponding period.
Revenue was down 19.1% to A$2 billion and its underlying EBITDA for the first half was A$119 million, compared to A$236 million in the same period last year.
GrainCorp Managing Director and Chief Executive Officer Mark Palmquist said earnings were lower year-on-year due to the significant reduction in crop production in eastern Australia, which is approximately 40% below last year’s near record harvest.
“Our Grains team has done a good job of adapting the network to the smaller harvest and closely managing its cost base. Pleasingly, the formation of the Grains business unit ahead of harvest has been effective with improving performance in a low-volume year while also improving customer service, rail utilization and absorbing the cost of integration,” Palmquist said.
He said the company’s Oils business unit was marginally down, reflecting weaker oilseed crush margins and one-off restructuring costs.
“Liquid Terminals continued to operate at a high utilization rate and Foods delivered a better performance due to good volumes, improved demand for specialty oils for infant formula and operational efficiency improvements,” he said.
Palmquist affirmed the 2018 full-year earnings guidance of between A$240 million and A$265 million and A$50 million to A$70 million of underlying profit.
“We are on track to deliver A$25-30 million in pre-tax benefits within 18 months through the restructuring and continuous improvement programs across Grains and Oils,” he said. “We will continue to manage cashflows to ensure our balance sheet remains strong. The major growth projects within GrainCorp’s capital works program are coming to their conclusion.”
GrainCorp’s share price has fallen 20% in the last 12 months.The company is an integrated grain business across three grain activities: storage and logistics, marketing and processing. It supplies grain and processed grain products to customers in domestic and international markets, with a focus on wheat, barley and canola.