Heavy harvest feeds GrainCorp interim results


Looming end of capital works expenditure flags financial boost

Heavy harvest feeds GrainCorp interim results
Mark Palmquist has lauded his Storage and Logistics team

 

GrainCorp has given itself a pat on the back after seeing a tripling of first half profits while handling a record eastern-state grain harvest.

The rural logistics and agribusiness firm reported an interim net profit rise of 341 per cent to $90 million, despite revenues rising only 18.7 per cent to $2.46 billion.

"GrainCorp’s strong first half performance benefited from the large Australian grain harvest and higher export volumes, combined with our intense focus on improving network efficiency and managing costs," MD and CEO Mark Palmquist says.

"Our Storage and Logistics team performed very well in response to the significant challenges of the record harvest and compressed export program.

"We provided a high level of service to growers and efficiently managed our supply chain labour costs.

"This has been achieved through our strategy of developing a modern, efficient network through Project Regeneration, which resulted in average receivals per site rising to 70,000 tonnes from 40,000 tonnes last harvest.

"Following harvest, our grains businesses and the broader industry are contending with significant supply chain disruptions, due to an extended industrial dispute affecting our Victorian rail provider and earlier bad weather."

The Storage and Logistics segment recorded a profit before tax of $85.3 million, up from the last first half loss of $700,000.

The good news extends to the firm’s GrainCorp Oils arm, which gained from increased canola supply, which drove down procurement costs.

It also gained from stronger demand for meal and continued high utilisation at GrainCorp Liquid Terminals.

The interim result supports February’s full year guidance of $130 million-$160 million in gross profits compared with last financial year’s $53 million and Palmquist sees better times as expenditure decreases.

"Our program of major capital works projects is largely due for completion over the next 12 months and we will enjoy the benefits in coming periods," he says.

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