GrainCorp, releasing its half year results, sees high global demand for Australian grain and oilseeds.

In the six months to the end of March,  underlying EBITDA from continuing operations was $140 million, up from $105 million.

GrainCorp has upgraded its full financial year earnings guidance to underlying EBITDA of $255 million-$285 million, up from $230 million -270 million.

Underlying NPAT is forecast at $80 million-$105 million (previously $60 million-$85 million). 

Analysts at Citi say the GrainCorp outlook highlights improved winter cropping conditions.

In a note to clients Citi says: “The improved winter cropping conditions highlighted by GrainCorp could see upside to ABARES’ current winter wheat crop forecast this year; with continued favourable soil moisture and an improved winter rainfall outlook.”

GrainCorp CEO Robert Spurway: “We are pleased with the positive momentum across the business.

“There is good export demand, that extends well into FY22, supported by high levels of carry-out grain anticipated at the full year. 

“Good sub-soil moisture across many parts of ECA is also positive for current winter crop planting. We are looking forward to working with growers and preparing for the next harvest.” 

Spurway described the half year results as strong and included a $70 million payment by GrainCorp under the Crop Production Contract (CPC).

“This result and the outlook, reflect a positive rebound in growing conditions on the east coast of Australia (ECA) and the operating initiatives now embedded in our business,” he says.

“Our Agribusiness earnings were up substantially, driven by the much larger crop and increased grain volumes in our network. 

“Receivals and exports were up materially, supported by strong global demand and pricing for Australian grain and oilseeds.” 

GrainCorp declared a fully franked interim dividend 8 cents a share. 

Half year at a glance:

Underlying EBITDA from continuing operations: $140 million (HY20: $105 million) 

• Underlying NPAT from continuing operations: $51 million (HY20: $27 million) 

• Statutory NPAT: $51 million (HY20: $78 million) 

• Declared interim dividend 8 cents per share fully franked (HY20: nil) 

• Recordable Injury Frequency Rate of 6.1 (30 Sep 2020: 6.5) 

• FY21 guidance: Underlying EBITDA $255-$285 million. Underlying NPAT $80-$105 million