SYDNEY, AUSTRALIA — GrainCorp reported on Nov. 12 that net profit after tax for the year was A$32.1 million or 10¢ per share, down 36.1% from A$50.3 million or 20¢ per share a year ago.

Revenue for the year was A$4.085 billion, down from A$4.094 billion in 2014.

“Solid performances from our processing operations have reduced the impact of the challenging conditions faced by our grains businesses,” said Mark Palmquist, managing director and chief executive officer. “Our processing businesses contributed approximately 85% of our earnings in a year constrained by a much smaller crop in eastern Australia – a clear demonstration of the importance of our commitment to diversification.”

Storage & Logistics earned A$42.5 million, down 40.8% from A$71.8 million. Performance for the 2015 fiscal year had a decreased carry-in of 1.6 million tonnes compared to 2.3 million tonnes. Grain throughput was 14.6 million tonnes slightly lower than the 2014 total of 15.7 million tonnes. Country receivals decreased slightly to 7.4 million tonnes from 8 million tonnes. Grain exports were 3.5 million tonnes compared to 4.4 million tonnes in 2014. Non-grain exports increased slightly from 1.9 million tonnes to 2.5 million tonnes in 2015.

The 2016 fiscal year outlook for Storage & Logistics includes lower than average forecast grain production in eastern Australia and lower carry-in of 1.6 million tonnes that will again put pressure on country grain receivals and export volumes. 

“As outlined earlier in the month, our grains businesses faced a tougher year off the back of last harvest’s smaller crop, which resulted in lower throughput volumes for Storage & Logistics and severely restricted opportunities for GrainCorp Marketing,” Palmquist said. “In this light I’m pleased with the cost control and risk management demonstrated by these businesses.”

Oils decreased to A$72.6 million from A$73.1 million in 2014. Performance for the 2015 fiscal year had a high capacity utilization for crushing with sales of 0.34 million tonnes. The stabilization of refining volumes with sales of 0.21 million tonnes but had volumes at lower margins. Oils continued to have high capacity and utilization for bulk liquid terminals. Complementary contributions from commodity management businesses were offset by low volumes for NZ Feeds.

The 2016 fiscal year outlook for Oils includes continued high capacity utilization expected for crushing facilities and bulk liquid terminals. Refining volumes are expected to remain stable. There is an expected earnings uplift following completion of network optimization and completion of bulk liquid terminal project. Domestic competition and demand for crushed and refined products will continue to influence performance.

“GrainCorp Oils has performed well with higher crush volumes and we are encouraged by the stabilization of refining volumes for GrainCorp Foods,” Palmquist said. “The Liquid Terminals business continues to perform strongly and we have made good progress in the various expansion projects across GrainCorp Oils.”

Allied Mills earned A$8.8 million, down 8.3% from A$9.6 million. Performance for the 2015 fiscal year included the completion of Tullamarine expansion of frozen bakery products.

The 2016 fiscal year outlook for Allied Mills earnings are expected to continue to be supported by value-added product initiatives and ranges such as frozen bakery products.

“Conditions are likely to remain challenging next year, with a very low carry-in of 1.6 million tonnes and another smaller crop likely to limit export opportunities from eastern Australia,” Palmquist said. “We do, however, expect a return to more typical grain marketing patterns in Australia due to lower year-on-year levels of export bookings relative to expected production.

“We also expect continued improvements in the performance of GrainCorp Oils thanks to the stabilization of refining volumes and partial contributions from Liquid Terminals projects and our consolidated oilseeds crushing and refining footprint,” he said.