Massive harvest ensures GrainCorp cashes in despite industrial dispute

A RECORD harvest in Australia has helped boost GrainCorp’s first-half profit more than fourfold and enabled the bulk grain handler and marketer to double its interim dividend.

But GrainCorp has warned its supply chain is contending with significant disruption because of an industrial dispute at its Victorian rail provider, Pacific National.

The dispute was affecting the number of trains available to shift grain, the company said yesterday as it posted its firsthalf results.

But GrainCorp has nonetheless maintained its forecast, issued in February, for underlying earnings of $130 million to $160 million for the year to September – up from $53 million last financial year.

GrainCorp’s profit for the six months to March surged to $90 million, from $20.4 million a year ago.

“This was really a result of these improved earnings coming from a record Australian crop and also continued strength in our malts business,” chief executive Mark Palmquist said.

The company has doubled its interim dividend from 7.5c a share to 15c, fully franked.

Shares in the group surged yesterday in the wake of the revelation, closing 8.3 per cent higher at $9.88..

GrainCorp said that the 160 silos it operated during the large east coast harvest received 70,000 tonnes of grain on average for each site, compared with an average of 40,000 tonnes at 180 sites in 2016.

Including grain that went direct to port from farms and other bulk handlers, total grain receivals surged from eight million tonnes a year ago to 13.3 million tonnes.

Grain exports totalled 3.6 million tonnes, up from 1.2 million tonnes a year earlier.

Mr Palmquist said the extended industrial dispute at Pacific National was affecting GrainCorp’s export program, cutting the number of trains available to shift grain by 30.