Australian grain giant, GrainCorp has posted a net profit of $50m for the six months up to 31 March, $38.2m less than the previous corresponding period.
The drop in profit is said to be the result of a smaller east coast grain harvest, as well as $11m in costs relating to the company’s network optimisation project within its oil division. The company also said that costs associated with the failed takeover bid from US giant Archer Daniels Midland last year has affected its balance sheet, The Weekly Times reports.
GrainCorp’s executive chairman, Don Taylor said that the company has performed well despite a lacklustre harvest on the Nation’s east coast.
“GrainCorp Malt and GrainCorp Oils have both delivered consistent results, with Malt continuing to operate at high capacity and GrainCorp Oils performing well despite continuing pressure on refining volumes,” Taylor said in a statement.
“Our Storage & Logistics business’ earnings were affected by a below average carry-in and the smaller crop in northern regions. This translated to lower grain receivals and increased demand from domestic end-users, limiting the amount of grain available for export.
“While the intense competition for a smaller crop also means that GrainCorp Marketing’s result was lower year-on-year, it is pleasing that this business has reported a positive result in an environment that has been extremely challenging.”
GrainCorp’s board declared an interim dividend of 15 cents per share, representing a payout ratio of 56 percent of NPAT before significant items.
Taylor said that the company expects full year 2014 earnings to be heavily weighted to the first half as a result of low residual levels of grain in the network and a busy export program. He also said that the company will be maintaining the full year earnings guidance that it provided in February.
“Looking further ahead, some good pre-planting rains have been recorded in many areas of our catchment with canola planting substantially underway in many areas and good starts for wheat and barley. However, it’s a long season and, as always, favourable conditions and good finishing rains will be critical to the delivery of a good crop in eastern Australia,” he said.