GRAINCORP has made a concerted push to minimise volatility associated with climate risk by embarking on successful diversifications into the malt and oils sectors, but this year’s half year results show a good season in eastern Australia is good news for the agribusiness.
The ASX-listed company posted a half year profit of $100 million and earnings before interest, tax, depreciation and amortisation (EBITDA) of $236 million.
This compares to corresponding figures of $32 million and $134 million for HY16.
Major drivers of the increase in profit were big leaps in earnings from the storage and logistics and marketing sectors of the business.
EBITDA for the storage and logistics business was $113 million, up from $28 million and the marketing sector’s EBITDA was $32 million, up from $8 million in the previous corresponding period.
GrainCorp chief executive Mark Palmquist said it was pleasing to see the company’s focus on creating efficiencies in its grain storage network pay dividends.
“There have been higher volumes of grain to export and we’ve taken advantage of that, in spite of the challenges presented by moving the record harvest in a compressed export program.”
Mr Palmquist said the GrainCorp upcountry network was a different beast to prior to the company’s Project Regeneration, which has streamlined the receival grid, closing smaller sites and increasing capacity at remaining centres.
“Average receivals per site have risen to 70,000 tonnes, up from 40,000 tonnes last harvest.”
There has been a 78 per cent rise in GrainCorp’s export program year on year, with half year exports sitting at 13.2 million tonnes.
However, it has not all been smooth sailing, with the Victorian train driver dispute causing serious disruptions to southern export programs.
Mr Palmquist estimated GrainCorp had lost 150,000 tonnes of capacity as a result of the industrial action since it began in March.
In the company’s other two major business segments, malt and oils earnings were on a par with 2016.
The company has invested in a new malt plant in Idaho in the US and sold another facility in Germany.
On the oils front, greater availability of canola and stronger demand for meal have been positives for the business.
GrainCorp declared an interim dividend of 15 cents per share up from 7.5cps last half year.