GrainCorp’s revenues fell 4% in the first half of 2015/16, as poor production in eastern Australia contributed to a significant grain export shortfall.
The agribusiness, which is responsible for a healthy portion of bulk haulage on Australia’s rail, exported half the amount of grain during the first half of 2015/16, recording 1.4 million tonnes, compared to 2.8 million tonnes in the first half last year.
The company attributed this decline to below-normal production in Western Australia.
The drop in grain exports contributed to a 3% revenue decline for the HY15 period.
Revenue for the Australian agribusiness was $1.97 billion this half compared to $2.06 billion for HY14. GrainCorp’s storage & logistics portfolio, specifically, recorded revenue of $209 million, down 25%.
The ASX-listed company announced overall profit of $30.2 million, down from $50.0 million in the first half last year.
Despite the struggles in grain, some of the business’s other segments performed well in the period.
“Good performances by GrainCorp Malt and GrainCorp Oils have helped offset the leaner period for the grains business,” managing director Mark Palmquist observed.
“GrainCorp Malt has contributed approximately half of our EBITDA for this period and continues to report high capacity utilisation,” he said, adding that GrainCorp Oils had had a “solid” first half as well.
“The smaller crop in eastern Australia last year means it’s been a tougher period for Storage & Logistics and Marketing,” Palmquist conceded.
“Lower production translated to reduced grain throughput and exports.
“However, we are starting to see the improved efficiencies associated with Project Regeneration and expect these to show through when crops return to normal levels.”
Project Regeneration is GrainCorp’s long-term plan to develop and expand capacity on its grain rail network.
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