E-Malt.com News article: 2704

Australia: Grain company GrainCorp Ltd reported on May 27a 28 % jump in first half net profit to $A12.5 million ($US8.81 million). Despite the profit hike, the firm kept its full year profit forecast at $A24 ($US16.92 million) to $A26 million, according to Asia Pulse. "GrainCorp is on track to achieve the forecast full year profit of $24-26 million despite the predicted subdued start to the year," managing director Tom Keene said. "We remain focused on organic growth and disciplined restructuring as we continue the transition away from the drought of 2002/03." He said the $12.5 million net profit for the six months to March 31, 2004, was influenced by "near-record low levels of carry over grain coming into the 2003/04 harvest and a slow first six months for grain exports". "Grain exports are expected to pick up in the second half," he said.

GrainCorp said first half revenue grew 44 per cent to $439.62 million. The company declared a 17 cent interim dividend fully franked, compared to no interim dividend the previous corresponding period, and a special dividend of 10 cents per share. That brought the total forecast dividends for the year to between 36 cents to 40 cents per share, the company said. "Our half year result has been influenced by the near record low levels of carry over grain coming into the 2003/04 harvest and a slow first six months for grain exports," Mr Keene said. "Grain exports are expected to pick up in the second half."

He said the company's strategy of geographic and earnings diversification was bearing fruit. The Queensland operations were on track to achieve the forecast $10-12 million in merger benefits and GrainCorp Marketing delivered strong earnings before interest, tax, depreciation and amortisation of $7 million for the six month period.

GrainCorp said it received 11.1 million tonnes in the six months, including 10.8 million tonnes of Winter crop and 300,000 tonnes of Summer crop. That represented a dramatic increase on receivals for the previous first half of 1.8 million tonnes. Despite a strong start to the season, the company said, the Sorghum crop in Central Queensland encountered difficulties because of little or no rain since planting.

"As a result the company has revised its Summer Crop forecast down by 200,000 tonnes to 0.8 million tonnes which is slightly above the long term average," GrainCorp said. "The full year receivals forecast has been revised accordingly to 11.6 million tonnes.

GrainCorp said its forecast throughput for the full year was 22 million tonnes, including 11.6 million tonnes total receivals and both export and domestic out-loading of 10.4 million tonnes.

At 31 March 2004, the total out-loading figure stands at 4.2 million tonnes of grain. The company expected export activity will increase in the second half of the year and as a result the forecast remains unchanged. Carry over for the full financial year was forecast to be 2.6 million tonnes. The company said it also exported 395,000 tonnes of woodchips and was forecasting a total export figure of 920,000 tonnes for the year.

GrainCorp said its Allied Mills business was the midst of a three year restructuring program to optimise its staffing, product mixes and logistics. Staffing levels had already fallen from 800 to 600 over the past eighteen months. This would fall by another 50 positions to 550 by the end of financial year, Mr Keene told journalists via teleconference.


31 May, 2004