WEST PERTH, AUSTRALIA — GrainCorp announced Feb. 26 that it expects to report fiscal year 2016 underlying EBITDA in the range of A$240 million to A$270 million (fiscal year 2015 A$235 million) and fiscal year 2016 underlying NPAT of A$40 million to A$55 million (fiscal year 2015 A$45 million).
Mark Palmquist, GrainCorp managing director and chief executive officer, said the expected result reflects the continued challenging conditions being felt across the entire industry.
“The agriculture sector in Australia continues to face the same macro conditions experienced in fiscal year 2015, including low grain stocks in eastern Australia, increased availability of grain globally and cheap ocean freight reducing Australia’s export competitiveness,” said Palmquist. “These headwinds have dampened the immediate outlook, but not the benefits of the progress we have made across the business on our strategic initiatives.”
“The Storage & Logistics business is being affected by another below average winter crop and low levels of grain carry in eastern Australia,” he said. “While our market share has remained in line with last harvest, the prevailing global commodity conditions are resulting in a delayed export program and this year we expect grain exports from eastern Australia to be only 3 million tonnes (fiscal year 2015 3.5 million tonnes).”
“The outlook for GrainCorp Malt remains solid. There has been good progress with the growth initiatives in GrainCorp Oils, however, our GrainCorp Foods and oilseed crush margins continue to be pressured, in line with global commodity conditions,” Palmquist said. “We remain firmly focused on the delivery of our strategy to diversify earnings and improve efficiencies. We are confident our strategy will continue to deliver significant value as cycles return to normal.”
GrainCorp will release its results for the first half of the 2016 financial year on May 11. GrainCorp’s fiscal year 2016 guidance remains subject to a number of variables, including:
• 2H16 volumes: sorghum receivals; direct to port receivals; port bookings and elevations;
• Global crush margins impact on Australian edible oils;
• New season opportunities for GrainCorp Marketing in Q4;
• Foreign exchange movements; and
• Barley and oilseed procurement.