SYDNEY, AUSTRALIA — GrainCorp announced on Nov. 13 earnings of A$293 million for fiscal year 2014, down 35% from A$395 million for 2013 due to dry weather, a smaller crop and challenges associated with reduced grain volumes.
“GrainCorp Malt and GrainCorp Oils have delivered solid performances, however our grains businesses have had to contend with persistent dry weather, a smaller eastern Australian crop and the challenges associated with reduced grain volumes,” said GrainCorp Chairman Don Taylor.
GrainCorp Storage & Logistics’ performance was restrained by a 47% drop in carry-in to 2.3 million tonnes (FY13: 4.3 million tonnes), a smaller crop translating to a 23% year-on-year reduction in receivals to 8 million tonnes (FY13: 10.4 million tonnes) and a 47% drop in grain exports to 4.4 million tonnes (FY13: 8.3 million tonnes).
The company has included an adjustment of $19 million after tax to its provision for claims in the Storage & Logistics business. The adjusted provision reflects a higher likelihood of claims arising from near record low grain tonnages in the network following a second below average eastern Australian harvest.
GrainCorp Oils benefited from continued strong performance and high capacity utilization in the liquid terminals business, offset by some pressure on refined oils volume in the Foods
Business, Taylor said.
Commenting on the operating outlook for FY15, GrainCorp Managing Director and Chief Executive Officer Mark Palmquist said, “We expect the environment to remain tight for our grains businesses. The current eastern Australian harvest is expected to be below average, this year’s carry-in is a near record low of 1.9 million tonnes, there is a smaller exportable surplus and there will again be competition for grain.
“It is encouraging to see GrainCorp Malt already has strong forward sales of 1.1 million tonnes and, while we anticipate ongoing volume pressures in refined edible oils, I am very positive about the performance and opportunities for our Liquid Terminals business within GrainCorp Oils,” he said.
Palmquist said that the eastern Australian harvest is now well underway.
“Growers have had to contend with continued hot and dry conditions in many areas, compounding the challenges of the growing season, which included low rainfall in the north and frosts in other areas. While it’s a smaller crop, the quality is generally good and we are all hoping for a good, clean run through to the end of harvest for those growers still in the paddock on headers. Some good rainfall in the next few weeks in northern regions is also required to encourage summer crop plantings,” Palmquist said.
“I am focused on ensuring we provide our grower customers with the best service and it’s reassuring to see that our consolidated network has been handling the receival task efficiently, with ongoing commitment to delivery turnaround, thanks to the additional efforts of our teams and the extra equipment we have been able to consolidate into the sites experiencing higher demand.
“With plenty of spare storage space and strong export demand, we’re confident that storing with GrainCorp provides growers with the most flexibility and more marketing options concentrated into the most convenient location,” he said.