Thursday 28th May, 2020

GrainCorp announces $59m loss

GrainCorp train. Photo: GrainCorp
Photo: GrainCorp

Grain receival, storage and transport firm GrainCorp has blamed drought conditions and international trade tensions for a $59 million loss in the six months ending March 31, 2019.

Fresh off the announcement takeover suitor Long Term Asset Partners had pulled its $3.3 billion bid, GrainCorp on Thursday outlined dismal financial outcomes for the first half of its financial calendar.

The company’s underlying earnings were down from $119 million in HY18 to just $27 million in HY19. Statutory net profit in HY18 was $36 million – dropping to the $59 million loss in HY19.

GrainCorp CEO Mark Palmquist said the results reflected a “particularly challenging” period which saw severe drought conditions in eastern Australia, and tumultuous international trade conditions.

“East coast Australian grain production was the lowest in over a decade and this has had a significant unfavourable impact on both our Grains and Oilseeds business,” he said.

Challenging conditions in eastern Australia are forecasted to continue into the second half of the financial period, according to GrainCorp’s own outlook.

“Planting for the winter grain crop is well underway in eastern Australia, however it is too early in the season to forecast grain production levels and the potential implications for GrainCorp,” the company said.

Due to the poor financial figures, GrainCorp did not provide shareholders with an interim dividend.

It said its financial performance in the second half would come down to conditions in eastern Australia, the impact of global markets and trade conditions, and foreign exchange movements.

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